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Alaska Energy: A First Step Toward Energy Independence


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Alaska Energy: A First Step Toward Energy Independence

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  • 1. ALASKA ENERGY A first step toward energy independence.A Guide for Alaskan Communities to Utilize Local Energy Resources January 2009 Prepared by: Alaska Energy Authority Alaska Center for Energy and Power 1
  • 2. Copyright Information: This publication for a Statewide Energy Plan was produced by the Alaska Energy Authority per legislative appropriation. The report was printed at a cost of $12.00 per copy2 in black and white, and $58.00 per copy in color in Anchorage, Alaska by Standard Register.
  • 3. Table of Contents6 Sustainable Energy for Alaskans 8 How this Document Should be Used 17 Railbelt Region22 Energy in Alaska33 History of Energy Policy in Alaska38 Current Energy Policy and Planning in Alaska44 Policies with Energy Implications55 Permitting57 Technology Chapters 58 Diesel Efficiency and Heat Recovery 74 Efficiency (End-Use) 84 Hydroelectric 101 Wind 120 Biomass 135 Geothermal 150 Heat Pumps 156 Solar 161 Coal 168 Natural Gas 175 Delivery 179 Energy Storage 190 Hydrokinetic/Tidal 204 Wave 211 Nuclear 217 Coal Bed Methane 223 Fuel Cells 224 Alternative Fuels232 Explanation of Database Methodology240 Glossary242 Units of Measure243 Acronyms - List of Organizations244 Acknowledgements 3
  • 4. T he narrative and model in this report are designed to provide information to engage Alaskans who have a passion to provide energy solutions, stimulate the Alaskan economy and provide leadership for the benefit of all Alaskans. Alaska has had many high-quality energy plans written over the years, but none ever gained traction to come to fruition. To increase the likelihood that energy solutions will become a reality, the new approach will engage Alaskans in the solution and invite their active participation in the selection and ownership of their alternative energy sources. The safe approach to conducting this work would have been to hire a consultant. With some risk but a large increase in the service to Alaskans, the Alaska Energy Authority chose to utilize the expertise of in-house staff. This personal accountability by the professionals at AEA will help ensure Alaskans have access to energy information and a single location they can work with to resolve their energy challenges and opportunities. As more information becomes available, the information will be placed in the energy model for use by decision makers long into the future. Steven Haagenson Statewide Energy Coordinator4
  • 5. 5
  • 6. Sustainable Energy for AlaskansW e Alaskans live in a magnificent state that hasmany blessings when it comes to energy, but also dependence on petroleum. This effort must be approached as a team effort, where each participant,some curses. Alaskans live in a state with abundant private or public, can provide value for permitting,energy resources, but are hampered by long distances construction, applied research and development,and low usages. natural resource management, financing, workforce development in management, design, business,The Alaska Energy Authority (AEA) has developed construction, operations, economic development,this document to act as a first step toward energy wealth retention, and leadership.independence for Alaskans. The document containstwo main sections - a narrative which you are Alaska Energy - First Stepsreading now, and a technology screening tool wehave developed to allow each community to reviewlocally available resources and determine the least- The first step in creating this document was tocost energy options based on the delivered cost of identify each community’s current energy needsenergy to residents. for electrical generation, space heating, and transportation. It is important to know these valuesEnergy use in each community is composed of three as they provide a reference or measuring stickmajor components: electricity, space heating, and against which we can measure alternatives. Electrictransportation. The relative level of use and cost for power usage was obtained directly from current PCEeach of these components differs across Alaska. For reports, while heating oil and transportation wasinstance, Anchorage residents pay comparatively estimated by the Institute of Social and Economicless for electricity and space heating, but more for Research (ISER) based on modeling.transportation due to heavy dependence on vehicletravel. Rural Alaskans see lower vehicle travel, AEA conducted 28 Town Hall Meetings across thebut have much higher costs for heating oil and state, engaging many Alaskans through the processelectricity. of seeking answers to three fundamental questions: 1) What resources near your community - whereAll of America is struggling with the high cost of you live, work, play, fish, and hunt - could possiblyenergy, but Alaskans have the resources, the ability, be developed to help lower energy costs? 2) Whatand the motivation to create long-term solutions that resources should not be developed? 3) Why not?will greatly benefit our children and grandchildren.AEA’s goal in developing the Alaska Energy Plan is The information gathered from these Town Hallto reduce the cost of energy to all Alaskans through Meetings was used to develop a resources matrixdeployment of energy technologies that are vertically for each community. Potential resources identifiedintegrated, economic, long-term stably priced, and included hydroelectric, in-river hydro, wind, solar,sustainable. wave, tidal, biomass, geothermal, municipal waste, natural gas, propane, coal, diesel, coal bed methane,In order to achieve this goal, we will be engaging and nuclear. Also identified were opportunitiesAlaskans throughout the state who have the expertise for gasification and production of Fischer-Tropschand passion to use local resources to reduce their liquids. 6
  • 7. Sustainable Energy for AlaskansFor each resource, AEA formed Technology Teamsmade up of people with expertise and a passionfor energy solutions who were asked to identifytechnologies options and limitations for eachidentified resource. The Alaska Center for Energyand Power (ACEP) at the University of Alaska wasbrought in initially to help guide the technologydiscussions, and ultimately went above and beyondin their work on the narrative and the comparativedatabase.Appropriate technologies for each fuel have beenidentified. Capital and operations and maintenancecosts for each technology have been determined andadjusted by region through use of factors developedby HMS Construction Cost Consultants.The net result is a focusing tool that will provideeach community with a high-level snapshot of theleast-cost options for electricity, space heating, andtransportation for their community. Prices will bebased on a delivered cost that includes capital costfor infrastructure. The delivered cost number canbe used to quickly compare the alternative energyoptions to diesel fuel based on a range ($50-$150) ofcrude oil prices.This first step in the ongoing Energy Plan isintended to provide a high-level tool to focus eachcommunity on its relative options for generatingelectricity and heat through the use of locallyavailable resources. This is an important step indeveloping a community, regional, and statewideenergy plan. This process is intended to occur instages, and it allows the state to provide assistancewith maximum support and buy-in from Alaskans.Starting at the local level and using this plan as abuilding block to develop regional and statewideenergy plans, the goal is to engage citizens directlyin developing energy solutions for Alaska. 7
  • 8. How this Document Should be UsedT he illustration on this page shows a samplecommunity energy meter. The energy meter is part within the cost range for diesel equivalent with crude oil between $50/bbl and $150/bbl. The $50-$150of the technology screening tool and allows for a range is considered the Yellow Zone and can includequick comparison between alternative energy options the entire range of energy alternatives.based on a range of future crude oil prices for each Some communities have options that exceedcommunity in the state. As part of this screening the diesel equivalent of $150/bbl. This range isanalysis, current electric and space heating costs are considered the Red Zone and indicates resourcescompared on a total cost basis with capital, operation that are probably not cost-effective to develop atand maintenance (O&M), and fuel costs for various this time. If no other resources exist, a broadertechnologies. The focus is on near-term, commercial, regional evaluation should be conducted to searchand proven for available optionstechnologies, in nearby communitiesalthough an with Green or Yellowassessment Zone resources. Theof some pre- high cost is likely acommercial or function of the size ofpotential future the community, or theoptions are also distance to availableincluded. resources.The options for In some communities,each community the resource capabilityare compared with is much larger thanthe current cost of the current energyenergy as well as requirements of thea diesel equivalent community. Forrange of $50/bbl resources developed tocrude oil (low their full capacity butprojection) to $150/bbl (high projection). There only using a portion of the energy, the cost wouldare many communities with access to alternative be high and could shift into the Red Zone. This isresources that can potentially provide energy at a the case with some of the larger hydroelectric andcost below the diesel equivalent of $50/bbl crude oil. geothermal resources. In this case, the communityA sub $50 resource is defined as the Green Zone and could look at ways to use excess capacity from thecan include wood (biomass) heat and wind/diesel resource to spur economic growth opportunities andoptions in the short term, as well as hydroelectric or lower the cost of energy to residents.geothermal options in the long term. The projectionindicates that a Green Zone option alternative could There are several communities that do not have anyreduce energy costs even when crude oil is at $150/ viable alternative energy resources. This findingbbl. demonstrates the need to follow up with regional evaluations to assess potential alternatives beyondFor most communities, the resource options fall the immediate area of the community. It is also 8
  • 9. How this Document Should be Usedlikely that some communities are too small or too and engage these entities in developing long-remote, and the most economic answer would be term energy solutions. Local buy-in will permitto continue to use diesel fuel for the forseeable more focused regional feedback to the legislature,future. However, this analysis indicates that most thus insuring that the best options are beingcommunities have at least one opportunity to reduce recommended for approval. The screening tool isdiesel use, even if solely through implementing also designed to be continually updated as moreefficiency measures. information is available. In this way it will serve as a valuable tool for the legislature and governorWe believe that use of local resources will help when they consider energy requests in future capitalstabilize local economies by developing jobs to, operate, and maintain energy systems. Localjobs will also be created where fuel collection, The focus of this work is on the non-Railbeltprocessing, and transportation are required. In this portions of Alaska. That is where the need toway, the dollars currently spent on diesel fuel could reduce energy costs is greatest. The Railbelt willbe recirculated within a community and used to be addressed through an Integrated Resource Planstrengthen the economic base. (IRP), which will evaluate multiple energy sources and delivery systems. It is likely that the solutionThe next step is to engage Alaskans at the regional for the Railbelt will be a combination of availablelevel to discuss results from this screening tool. resources such as large hydroelectric projects,These regional meetings will provide a forum for natural gas supplies, pipelines, biomass, wind, andadditional community input. Meetings will also beconducted with utilities, municipalities, and native geothermal systems.corporations to develop public/private partnerships 9
  • 10. How this Document Should be UsedA laska has abundant resources and Alaskans haveenjoyed relatively low-cost diesel prior to the pricing to shift from diesel as much as possible, even when prices are low, if we are to avoid high costs in thesurge in 2007 that extended through the summer of future.2008. When fuel prices are low and stable, interest This document can provide insight into the energyin the use of locally available alternative fuels is opportunities that lie ahead for Alaskans. Thelow. When prices spike, interest likewise becomes technology screening database is based on datahigh, but the opportunity to use lower-cost fuels collected from numerous sources throughout themay not exist without proper planning, research, state. Where data has not been collected, modelsand development. During oil price spikes in the were developed to approximate the missing data.1980s, there was much interest in alternative energy For example, ISER developed a model to predict theacross the nation, including Alaska. Nevertheless, amount of heating oil used for spacing heating andprojects such as the Susitna Hydroelectric Dam were vehicular transportation by community.canceled when crude oil dropped to $9.00 per barrel. Data pertaining to population change and PowerWe have recently seen the price of crude drop from Cost Equalization has also been incorporated and is$124/bbl to $28/bbl, and lower, in a reduction felt to be reliable and accurate.similar to the one in the 1980s. This drop in oilprices hits Alaska doubly hard, as a reduction in The cost estimates contained in this report werestate revenue limits funds available to develop the conducted at the conceptual level with no site-necessary infrastructure needed to switch to lower- specific design or scope development. Costcost fuels when crude oil prices again rise. The estimates were based on similar historical energygeneral consensus is that oil prices will again rise, projects constructed in Alaska, vendor estimates,but there is on-going debate about the future price of and historical studies and reports for specificcrude oil and the long-term volatility. Alaska is an applications. These need to be recognized foroil-producing and exporting state, but there are many what they are: high level conceptual cost estimates.external factors that will increase or decrease crude The recommendations are based on the best dataoil pricing. In a global market with large consumers currently available, but detailed site specific costlike India and China, Alaskans will be riding the estimates must be completed prior to projectmarket roller coaster with little influence on the final selection to determine more accurate values.price determination. What can be controlled in thisenergy world?Alaska has numerous energy resources and thepower to choose its fuel supplies. A method isneeded to place these choices in perspective. Publicawareness needs to increase. There may be energyoptions that can provide lower-cost energy thantoday’s $50/bbl oil. Resources that could be used topower and heat Alaskan communities and provideopportunities for local economic development shouldnot sit unused. Alaskans must make the commitment 10
  • 11. How this Document Should be UsedT he technology screening tool exists in twosections. The first is the energy meter page for a fast A community can select its fast scan sheet and look for resources in the Green Zone. If resources existscan of local resources. The second is in a numeric in the Green Zone, this is an indication that localresults format for a more in-depth analysis of the resources might provide a less expensive stable-data. priced energy source, even if the cost of crude oil were to rise. Green Zone resources should beThe energy meter page has been prepared for every reviewed for projected construction costs and time,community in Alaska located “outside” the Railbelt since the most economic projects, such as hydro orregion. The numbers are reported as specific values geothermal, tend to have a longer construction time.for convenience, but in actuality contain a high If all Green Zone projects have long constructiondegree of uncertainty as a result of incomplete times, look at the Yellow Zone for resource optionsdata, conceptual cost estimates and estimates with a shorter delivery schedule.based on models. They are intended to provide anapproximate value for the delivered cost of energy The Yellow Zone is the range of possible crudefrom a particular resource. Prior to finalization of pricing we have seen over the past few energy resource selection, a detailed site-specific Predicting crude oil prices can be risky if notcost estimate must be done to determine actual impossible. The recent reduction in crude prices isproject costs for financing and benefits evaluation. believed to be temporary, but exactly when and how much prices will rise is not known. If resourcesThe energy meter page has two meter faces, one for exist in the Yellow Zone, this indicates that thethe cost of electricity and one for the cost of space alternative resource may not be economic unlessheating. The meter dial has three colors, green, crude oil prices were to rise. This is also the zoneyellow, and red. They are linked to the cost of crude where the state could assist in paying down theoil. In the past few months, crude oil prices have capital debt component to reduce the resultant costranged between $150/bbl to $30/bbl. With the price of energy to the community. If $50/bbl is the targetvolatility of crude oil, the meter face was developed point for state assistance, then, rather than payingto show the locally available energy sources with the entire capital cost of the alternative project, therespect to a variable pricing of crude oil. Rather state assistance should be limited to paying capitalthan predict the future price of oil, the green, yellow, costs down to the Green Zone or the $50/bbl targetand red zones have been created. The Green Zone point. Using the target point concept will helpdefines relative costs for crude oil pricing of $50/bbl produce alternative energy at a level that can beor less. The Yellow Zone defines cost above $50/ sustained. For example, large hydroelectric projectsbbl, but below $150/bbl. The Red Zone represents are capital intensive but have low O&M cost oncrude oil costs above $150/bbl. the order of $0.01/kWh. Rather than assuming full capital relief and yielding the low O&M cost only, aThe cost of electricity and space heating from diesel balance of loans and grants could be applied to bringfuel shown on the meters are computed using the the resulting energy costs down to the pricing pointprice of crude oil, delivered to the community and equivalent. The all or nothing approach to capitalused in the existing infrastructure. The electrical funding may result in the wrong pricing signal forcosts include non-fuel costs so the electrical cost energy, and over-expend funds in one area whileshown will relate to the cost per kilowatt-hour shown other areas will be paying much higher prices. Bothon the billing statement, prior to the applicable PCE short and long-term projects can exist in the Yellowreduction. 11
  • 12. How this Document Should be Used Zone. As the values of resources have a wide evaluation of the balancing of the risks and rewards. range, several of the lower-cost options should be The community energy model can be used to analyze reviewed for further investigation. As a general and compare different methods and levels of financing rule, short term projects should be selected first, and grants. with the addition of larger or longer term projects Learning from history, we need to recognize past that will further reduce the cost of energy to the performance, to avoid the historical results of community. alternative energy plans described in the ‘History of The Red Zone includes projects that are not cost Energy Policy in Alaska’ section of this document. effective at this time and will not be so unless Specific factors which impeded success of alternative technology develops to reduce the resulting energy energy initiatives as stated in the House Research cost, or until crude oil is above the $150/bbl price. Report 85-C published in 1985 include: The numeric results sheet can be used for a more in- • State agencies did not develop strong depth analysis of the data. The first part identifies management capabilities the current energy needs and costs for electricity, • State agencies lacked methods for assessing space heating, and transportation. the technical and financial feasibility ofSample Community The current use can be compared to the existing projects capacity and energy usages to determine the • Coordination among state agencies was often general resource size required for the community. lacking If a selected resource is much larger than the • Features of an alternative technology were community needs, an economic development poorly matched with a useful rural application opportunity exists. For the community to achieve • Unrealistic expectations existed about what an the lowest price, the resource will need to be used agency or technology could accomplish to its maximum. In this case, additional loads • Too much responsibility was delegated to must be developed to match the capacity of the contractors while the state often assumed the energy resource. For example, if a geothermal risk in performance of the project source exists that is larger than the community needs, the community could develop a fish cannery Development of public/private partnerships is critical and use an absorption chiller to make ice in the for successful implementation, with recognition of summer or grow vegetables under grow-lights in a our respective strengths and weaknesses to ensure all geothermally heated greenhouse in the winter. parties are providing quality service to the effort. Financing of energy projects is expected to be Private sector development by electric utilities, native a mix of bonds, loans, private equity, grants or corporations, municipalities and other qualified entities financial guarantees. To ensure the financial will provide access to management, business and success of energy projects, good business practices operations expertise. Detailed business planning at would require the creation of a project scope, the local level will ensure the technical and financial cost estimate, project business plan, management feasibility of the projects. The business plans will be team, design team, financing plan, and permitting required in all applications for state assistance and be a strategy. Business plan development will also be core part of the evaluations by state agencies, similar to necessary for grant and loan approval, with an the Renewable Energy Fund - Request for Applications 12
  • 13. How this Document Should be Usedevaluation and selection process. The local business from Alaskans on the initial results and to obtainplans will provide a tool to help identify and evaluate additional input. These discussions are an importantthe best application of an alternative resource. The step in creating a regional vision for energyrisks and rewards must be balanced and shared by the development that has local support and buy-in. Theprivate, public and construction sectors. AEA team will discuss specific local opportunities and explain the use of the report in a large groupEngaging Alaskans setting. In addition to the public meetings, the AEA teamT he AEA team will engage Alaskans through aseries of public meetings across the state. Regional will meet with the local municipalities, utilities, native corporations, and other groups with an interest in resolving the Alaskan energy challenge.meetings will be conducted in early 2009. The public These discussions will be conducted in smallermeetings will be used as an opportunity to explain group settings and will help identify the people whoto local residents the use and the results of the have passion, expertise, knowledge and a realisticreport. This is also an opportunity to obtain feedback perspective for a specific resource and technology. 13
  • 14. How this Document Should be Used Akutan Energy Used 39% Heat 46% Tr a nsp or t a t i on El e c t r i c 15% Total: $964 Per capita Heat $372 Per capita POPULATION: 859 Transportation $147 Per capitaSample Community Electricity: $444 Per capita 14 Monday, January 12, 2009 Akutan Aleut Corporation Page 1 of 5
  • 15. How this Document Should be Used Regional CorporationAkutan Aleut Corporation House 37 Senate : S POPULATION 859 LATITUDE: 54d 08m N LONGITUDE: 165d 46m Aleutians East BoroughLOCATION Akutan is located on Akutan Island in the eastern Aleutians, one of the Krenitzin Islands of the Fox Island group. It is 35 miles east of Unalaska, and 766 air miles southwest of Anchorage.ECONOMY Commercial fish processing dominates Akutans cash-based economy, and many locals are seasonally employed. Trident Seafoods operates a large processing plant west of the City for cod, crab, pollock and fish meal. The population of Akutan can double during processing months. Seven residents hold commercial fishing permits, primarily for halibut and other groundfish. Subsistence foods include seal, salmon, herring, halibut, clams, wild cattle, and game birds.HISTORY Akutan began in 1878 as a fur storage and trading port for the Western Fur & Trading Company. The companys agent established a commercial cod fishing and processing business that quickly attracted nearby Unangan to the community. A Russian Orthodox church and a school were built in 1878. Alexander Nevsky Chapel was built in 1918 to replace the original structure. The Pacific Whaling Company built a whale processing station across the bay from Akutan in 1912. It was the only whaling station in the Aleutians, and operated until 1939. After the Japanese attacked Unalaska in June 1942, the U.S. government evacuated Akutan residents to the Ketchikan area. The village was re-established in 1944, although many villagers chose not to return. This exposure to the outside world brought many changes to the traditional lifestyle and attitudes of the community. The City was incorporated in 1979. Sample CommunityCurrent Energy Status PCE Estimated Local Fuel cost @ $110/bbl $4.71Electric (Estimates based on PCE) /kw-hr Current efficiency 11.81 kW-hr/gal Fuel COE $0.45 /kw-hr Estimated Diesel OM $10,206Consumption in 2007 48,913 gal Est OM $0.02 /kw-hr Other Non-Fuel Costs: $98,502 Average Load 58 kW NF COE: $0.19 /kw-hr Current Fuel Costs $230,488 Estimated peak load 116.51 kW Total $0.66 Total Electric Average Sales 510,306 kW-hours $339,196Space Heating (Estimated) 2000 Census Data 2008 Estimated Heating Fuel used: 56,012 gal Fuel Oil: 100% Estimated heating fuel cost/gallon $5.71 Wood: 0% $/MMBtu delivered to user $51.81 Total Heating Oil Electricity: Community heat needs in MMBtu 6,721 0.0% $319,950Transportation (Estimated) Total Transportation Estimated Diesel: 22,154 gal Estimated cost $5.71 $126,547 Energy Total $785,693 15Monday, January 12, 2009 Akutan Aleut Corporation Page 2 of 5
  • 16. How this Document Should be Used Possible Upgrades to Current Power Plant Power Plant - Performance Improvement to higher efficiency Upgrade needed: Capital cost $7,500 Semiannual Circuit Rider Annual Capital cost $628 $0.00 /kw-hr Status Completed Estimated Diesel OM $10,206 $0.02 New fuel cost $194,457 $0.38 Savings Acheivable efficiency 14 kW-h Avg Non-Fuel Costs: $108,708 $0.19 New Fuel use 41,267 $35,402 New cost of electricity $0.55 per kW-hr Diesel Engine Heat Recovery Heat Recovery System Installed? Capital cost $163,112 Is it working now? Annual ID $13,663 BLDGs connected and working: Annual OM $3,262 Value Total Annual costs $16,926 SavingsSample Community Water Jacket 7,337 gal $41,910 Stack Heat 0 gal $0 Heat cost $20.88 $/MMBtu $24,985 Alternative Energy Resources Geothermal Capital cost $38,500,000 per kW-hr Heat Cost $/MMBtu : Installed KW 5000 Annual Capital $2,587,805 $0.06 $18.22 kW-hr/year 41610000 Annual OM $1,155,000 $0.03 $8.13 Fuel cost: $0 $0.00 Site Name Akutan - Shallow Total Annual Cost $3,742,805 $0.09 $26.36 Project Capatcity 200 MW Non-Fuel Costs $0.21 Shallow Resource 0 Feet Alternative COE: $0.30 Shallow Temp 99.00 C % Community energy 8154% Savings New Community COE $7.55 ($3,403,609) (includes non-fuel and diesel costs) Geothermal Capital cost $37,500,000 per kW-hr Heat Cost $/MMBtu : Installed KW 6000 Annual Capital $2,520,589 $0.05 $14.79 kW-hr/year 49932000 Annual OM $1,125,000 $0.02 $6.60 Fuel cost: $0 $0.00 Site Name Akutan - Deep Total Annual Cost $3,645,589 $0.07 $21.39 Project Capatcity 200 MW Non-Fuel Costs $0.21 Shallow Resource 0 Feet Alternative COE: $0.29 Shallow Temp 99.00 C % Community energy 9785% Savings New Community COE $7.36 ($3,306,393) (includes non-fuel and diesel costs) 16 Monday, January 12, 2009 Akutan Aleut Corporation Page 3 of 5
  • 17. How this Document Should be UsedHydro Capital cost $2,507,920 per kW-hr Heat Cost $/MMBtu : Installed KW 197 Annual Capital $97,472 $0.17 $50.44 kW-hr/year 566166 Annual OM $55,200 $0.10 $28.57 Fuel cost: $0 $0.00 Site North Creek Total Annual Cost $152,672 $0.27 $79.01 Study plan effort feasibilty Non-Fuel Costs $0.21 Plant Factor 69 % Alternative COE: $0.48 Penetration 0.52 % Community energy 111% Savings New Community COE $0.51 $186,524 (includes non-fuel and diesel costs)Hydro Capital cost $2,509,760 per kW-hr Heat Cost $/MMBtu : Sample Community Installed KW 209 Annual Capital $97,543 $0.14 $40.76 kW-hr/year 701186 Annual OM $55,200 $0.08 $23.07 Fuel cost: $0 $0.00 Site Loud Creek Total Annual Cost $152,743 $0.22 $63.83 Study plan effort feasibility Non-Fuel Costs $0.21 Plant Factor 77 % Alternative COE: $0.43 Penetration 0.54 % Community energy 137% Savings New Community COE $0.51 $186,453 (includes non-fuel and diesel costs)Wind Diesel Hybrid Capital cost $4,253,640 per kW-hr Heat Cost $/MMBtu : Installed KW 600 Annual Capital $285,911 $0.23 $68.73 kW-hr/year 1218860 Annual OM $57,184 $0.05 $13.75 Fuel cost: $0 $0.00 Met Tower? no Total Annual Cost $343,096 $0.28 $82.48 Homer Data? yes Non-Fuel Costs $0.21 Wind Class 7 Alternative COE: $0.49 Avg wind speed 8.50 m/s % Community energy 239% Savings New Community COE $0.89 ($3,900) (includes non-fuel and diesel costs) 17
  • 18. Railbelt Regiono pportunities and challenges in the RailbeltRegion differ from those in other parts of Alaska. The complete Request for Proposals on the Regional Integrated Resource Plan for the Railbelt Region ofThe Railbelt electrical grid is defined as the service Alaska can be found on the Alaska Energy Authorityareas of six regulated public utilities that extend website, Fairbanks to Anchorage and the Kenai The current generation mix includes a number ofPeninsula. These utilities are Golden Valley Electric existing hydroelectric power plants that are operatingAssociation (GVEA); Chugach Electric Association in the southern portion of the Railbelt. Two coal-(CEA); Matanuska Electric Association (MEA); fired power stations (one operational) are positionedHomer Electric Association (HEA); Anchorage within GVEA’s service area at Healy River, nearMunicipal Light & Power (ML&P); the City of extensive sub-bituminous coal resources availableSeward Electric System (SES); and Aurora Energy, from the Usibelli coal mine.LLC as an independent power producing utility.Sixty five percent of Alaskan population lies within The Cook Inlet gas basin still yields large quantitiesthe Railbelt region. of natural gas for power generation and space heating, but known reserves are now falling andThe southern portion of the Railbelt: Mat-Su Valley, dropping field operating pressures are causingAnchorage, and the Kenai Peninsula are highly concern that the region may not be able to dependdependent on natural gas as a source of electricity on lower Cook Inlet for adequate gas supplies inand heat. The northern portion of the Railbelt the future. There are several proposals to constructincluding Fairbanks and other communities in the pipelines that could bring Alaskan North SlopeInterior relies on petroleum fuels in addition to natural gas into the Railbelt. Consideration of thesenatural gas, coal and hydroelectric electrical imports potential fuel sources will be a part of the integratedfrom the south. Petroleum fuels provide the majority resource plan for the Railbelt.of energy used for transportation across the entirestate. A number of future generation projects have also been proposed, among them wind power projects,Nearly all of the thermal generating capacity in the large-scale and small-scale hydroelectric powerRailbelt is more than 20 years old, and much of projects, Fischer-Tropsch plants, coal-fired powerit is more than 30 years old. The majority of the stations, and turbines fired by fuel oil or natural gasgeneration is predominately combustion turbine turbines.generation. There are five utilities to the south of the Future fuel supplies for the Railbelt are diverse.Alaska Range. GVEA is the sole utility to the north. Near-term fuel supplies include natural gas from the Lower Cook Inlet Basin, petroleum fuel suppliesA Regional Integrated Resource Plan (RIRP) is from Fairbanks and Kenai Peninsula refineries, andbeing developed to identify and evaluate the best coal resources near Healy and Chuitna. Significantresource mix to insure that least-cost options for quantities of North Slope natural gas are alsoelectricity and heat are developed in the Railbelt available, although there is no pipeline currentlyregion. The RIRP will be completed in late 2009 available to bring this gas to the Alaska Railbelt.and will consider multiple energy options and Trucking of LNG from the North Slope is beingmake a recommendation on specific projects to be investigated as an interim opportunity to use Northdeveloped. Slope natural gas to reduce the cost of energy to the 18
  • 19. Railbelt RegionFairbanks area. If the large-scale Alaska Natural Gas Regional Integrated Resource PlanPipeline is constructed, then significant quantities of (RIRP) for the Railbeltnatural gas will become available in Fairbanks. Acompendium of known reports, RCA orders, and The goal of the Regional Integrated Resource Planother data are available on the AEA website at www. for the Railbelt (RIRP) is to minimize future, via supply costs and maintain or improve current levelsthe ‘Resource Documents’ link under the section, of power supply reliability through the development**Existing Railbelt Electric Grid data. of a single, comprehensive resource integration plan. The plan will identify and schedule a combination ofThe Susitna Hydro Evaluation generation and transmission (G&T) capital projects over a 50-year time horizon.ProjectThe large-scale Susitna Hydro Project was proposedin the 1980s to provide hydroelectric power forthe Railbelt. It was evaluated extensively by thestate, but tabled in 1985 when oil prices droppedprecipitously. AEA is currently engaged in the re-evaluation of the feasibility of this project. Historicalinformation about the Susitna Hydro Project isavailable at intends to complete these studies on or beforeJune 1, 2009. The RIRP for the Railbelt will requireconsideration of information from the Susitna HydroEvaluation Project.The Railbelt Electrical GridAuthority ProjectAEA recently completed the Railbelt Electrical GridAuthority (REGA) Project, which recommendsbusiness structures that will own, operate, maintain,and control generation and transmission assetsthroughout the Railbelt.1 The project considered Healy Clean Coal Projectseveral different energy futures for the AlaskaRailbelt, and a regional plan for generation andtransmission was part of this study. The final reportand other resource documents are available online at 19
  • 20. Railbelt RegionThe plan is intended to provide: • An assessment of loads and demands for the The RIRP will include consideration of the following Railbelt Electrical Grid for a time horizon of energy sources: 50 years, including new potential industrial demands; • Healy Clean Coal Project • Projections for Railbelt electrical capacity • Susitna Hydroelectric Project (including and energy growth, fuel prices, and resource phased development) options; • Chakachamna Hydroelectric Project • An analysis of the range of potential generation • Fire Island Wind Power Project resources available, including costs, time for • Eva Creek Wind Project construction, and long-term operating costs; • Fairbanks Fischer-Tropsch Project (energy • A schedule for existing generation project source and fuel source) retirement, new generation construction, • Chuitna Coal Project (energy source and fuel and construction of backbone-redundant source) transmission lines that will allow the future • Nenana Basin natural gas Railbelt Electrical Grid to operate reliably • New gas reserves and exploration in Cook under open access tariffs, with a postage stamp Inlet rate for electricity and demand for the entire • North Slope natural gas Bullet Line Railbelt as a whole; • LNG trucked from the North Slope to • A long-term schedule for developing new fuel Fairbanks supplies that will provide for reliable, stably- priced electrical energy for a 50-year planning In order to integrate Susitna development with horizon; Railbelt Electrical Grid capacity and energy needs • A diverse portfolio of power supply that the RIRP will consider a number of options for includes in appropriate portions renewable bringing generation sources online, including the and alternative energy projects and fossil fuel phased development of the Susitna Hydro Electric projects, some of which could be provided by Project. The RIRP will also consider input from the independent power producers; Wind Integration Study currently being conducted • A comprehensive list of current and future by AEA, and it will include an analysis of the role generation, transmission, and electric power of demand side management rules and the ability to infrastructure projects, each one including a reduce generation resource and energy requirements project description, narrative, location, fuel if such programs are implemented. source, estimated annual fuel consumption, power output capacity, and energy output, both The RIRP will also consider potential contributions annually and monthly. of a merchant power market, where energy needs could be partially met by tenders from the RailbeltFor reasonable generation fuel supply configurations, G&T entity for a portion of the power supply needs.the RIRP will develop and recommend up to three The RIRP process will analyze a range from 0% tofeasible resource plan scenarios, complete with 25% of power needs being supplied by merchantassessment of costs and benefits, and collective and power suppliers (Independent Power Producers).individual impacts on utility tariffs. 20
  • 21. The RIRP will also consider a scenario where in10 years all Railbelt G&T assets will be owned,controlled, maintained, and operated by a singlebusiness entity.Transmission planning for the RIRP will begin withthe most recent Chugach and GVEA transmissionplans integrated into an overall interconnected griddevelopment. It will be assumed that transmissionprojects will be accomplished cooperatively with theserving distribution utility whose service area thetransmission line must traverse.The RIRP will consider future industrial loadscompared to a baseline load growth (demand andenergy requirements) scenario, that assumes Railbeltdevelopment without new, heavy industrial highpower demand. An evaluation of potential futureindustrial projects for the Railbelt and of incrementalcosts identified for increasing G&T capabilities tosupply industrial loads will be completed. Thiswill include the Donlin Creek mining projectsand the Pebble Mining project as possible gridinterconnected loads, as well as a third, undefinedbut similarly sized industrial project. 21
  • 22. Energy in AlaskaIntroductionIt is difficult to conceive many human activities that 43% of total energy end-use in Alaska, however ado not in some way depend on affordable, reliable large portion is used for international flights and isenergy. Whether it is providing fuel for our vehicles, not actually consumed in-state. An additional 484electricity and heat for our homes, or energy for the Mmbtu can be attributed to energy used for oil andproduction and transportation of the products we use gas production in 2006, and while this was energydaily, almost everything we do depends on a constant consumed in-state, a vast majority of the productsupply of energy. Inexpensive energy has helped was shipped out of state as crude oil exports.our society create wealth and, as an energy exportingstate, is a cornerstone of our economy. Alaska is also home to tremendous untapped or underutilized energy resources, including some ofThe United States uses more energy per capita than the highest concentrations of fossil and renewableany other country in the world, and Alaska as a state energy resources on earth. In addition to the well-has the highest per capita energy use in the nation known oil and natural gas resources on the Northat 1112 Mmbtu per person. This is more than three Slope and in Cook Inlet, Alaska’s proven coal re-times higher than the national average of 333 Mmb- serves represent the 4th largest fossil energy resourcetus, and is in part due to our climate, with long cold in the world. Alaska also has significant undevel-winters throughout most of the state requiring more oped geothermal resources in the Aleutian Islandenergy for heating homes. However, our geographic volcanic arc, abundant untapped hydropower, wind,location and oil and gas industry also contribute and biomass resources, and the majority of the tidalsignificantly. For example, almost 32 million bar- and wave power potential in the United States.rels of jet fuel were used in 2006. Jet fuel constitutes How Much Energy Does the Average Alaskan Use? A long distance sled dog puts out 5 kW, or 17 Mmbtus, based on a 10,000 kcal/ day diet during a typical day on the Yukon Quest or Iditarod. This means that in order to generate the amount of energy needed by each Alaskan every day, we need the equivalent effort of 65 Iditarod sled dogs. 22
  • 23. Total Annual Energy Consumption per Capita Energy in Alaska Data from the United States Energy Information Administration (EIA), based on 2006 values.23
  • 24. 24 Energy in Alaska Energy diagram produced by the Alaska Center for Energy and Power based on data from ISER, the Alaska Department of Natural Resources, the U.S. Army Corp of Engineers, and the U.S. Energy Information Administration
  • 25. Energy in AlaskaEnergy Flow in AlaskaIn order to reduce the cost of energy for Alaskans, it tricity, where on average 66% of the energy used byis important to understand how energy is produced our power plants is dissipated as waste heat.and how it is used. The energy flow diagram on theopposite page describes the inputs for Alaska energy It is also interesting to note that since 2001 (the lastconsumption, as well as the amount used by the time ISER completed an energy flow diagram for theresidential, commercial, industrial, and transporta- state), residential energy use increased by 18% whiletion sectors. While the values used in this diagram the state population increased by only 7%. Thisare based on 2006 data, the only recent significant shows that we are not doing a good job impelement-change in major energy use patterns is the closing of ing energy efficiency measures at the level of thethe Agrium Fertilizer plant on the Kenai Peninsula, individual home owner, which should be the lowestwhich has eliminated urea exports out of the state. cost and consequently the first area addressed when seeking opportunities for reducing the cost of energy.Energy flow diagrams are useful for visualizingwhere energy comes from and where it goes. They Unfortunately, the picture of energy flow for thealso demonstrate the inefficiencies associated with entire state of Alaska does little to show what is hap-various energy conversion technologies as energy is pening in any particular region, let alone in a single‘lost’ between the developed resources (left side of community. For example, a large fraction of thediagram = 2173 trillion btus), energy exports (top of hydropower is produced in southeast Alaska, whilethe diagram = 1435 trillion btus), energy consumed natural gas is a large component of energy supply in(right hand side = 363 trillion btus), and energy the Anchorage area and Kenai Peninsula, as well as aimported (bottom of the diagram = 70 trillion btus). few communities on the North Slope. Coal is solelyThis is particularly evident in the production of elec- used in Interior Alaska for both power generation and heating. What is 1 trillion btus? The units used for the energy flow diagram are in trillion btus (British Thermal Units), where 1 btu is the energy required to raise 1 pound of water 1 degree Fahrenheit. Another way to understand what a trillion btus represents is that each Alaskan uses nearly 1 million BTUs per day; so 1 trillion BTUs is about enough energy for a day and a half of energy use for all of Alaska. Alaska’s total energy consumption in 2006 = 419 trillion btus divided into the following sectos: • Residential 45 Trillion BTUs • Commercial 45 Trillion BTUs • Industrial 26 Trillion BTUs • Transportation 263 Trillion BTUs 25
  • 26. Energy in Alaska26
  • 27. Energy in AlaskaHistorical Trends in Energy ConsumptionUsing data on the consumption of energy from the the late 1960s, and by the early 1980s natural gasU.S. Energy Information Administration (EIA), we was the predominant source of energy used in Alas-can track the amount of energy used in Alaska since ka. When oil and gas production began on the Northstatehood. These estimates of consumption from the Slope in the late 1970s, natural gas consumption byEIA also include energy used during oil and gas ex- industrial users increased dramatically because ittraction processes, and jet fuel from international air was used to power North Slope operations. All othertravel. The graph below shows the gross consump- fuels, including diesel, motor gasoline, jet fuel, andtion of energy in Alaska from 1960 through 2006. coal, have contributed relatively stable shares of totalOil and gas production began in Cook Inlet during energy consumption per capita in the state. Chart created by ISER based on data from the United Stated Energy Information Administration 27
  • 28. Energy in AlaskaPutting the Cost of Energy in ContextWhile energy and its cost to our communities are the is clear, what is less definitive is whether these risingmain focuses of this document, the context of energy costs directly correlate to out-migration from rural towithin the social framework of Alaskan communi- urban areas, and out of the state completely.ties must also be considered. Energy is ultimately atool used to achieve a certain quality of life. Energy ISER recently completed a study that indicatesheats homes, runs appliances, provides light, fuels migration from rural to urban areas of the state is aour vehicles, and powers communication equipment, long-term trend caused by a number of factors andamong other applications. With this fact in mind it that it has been occurring for generations in someis clear that state energy planning must look at more parts of the state. There has also been a small netthan simply reducing the cost of energy in communi- migration out of the state since 2002. Many factorsties throughout the state. The planning effort must contribute to this trend, including the overall highalso look at the much more complex goal of improv- cost of living in Alaska. In general, people migrateing and sustaining the quality of life across the state to improve their lives by increasing their access toto retain a stable population base, and diversify the opportunities such as better paying jobs, educationeconomy. for themselves and their children, and a lower cost of living. It is possible that the current spike in energyThe statement has often been made that many Alas- costs may serve as a tipping point, or final strawkan rural communities are dying, and this is fre- stressing rural residents to the point where the deci-quently attributed to the high cost of energy in those sion to leave is finally made. This decision is alsolocations. It is easy to document the fact that resi- frequently influenced by other considerations: thedents in most rural communities spend a dispropor- lack of adequate housing, lack of well paying jobs,tionate percentage of their gross income on energy and deterioration of social networks due to prior out-when compared to the more urban areas of the state. migrations and other social issues.According to ISER, in 2006 rural residents spentapproximately 9.9% of their total income for energy- In fact, an attitudinal survey of 600 Alaska Nativesrelated expenses, an increase from 6.6% in 2000, and 302 non-Natives who had moved from rural toand there has almost certainly been a further increase urban areas of Alaska was conducted by the Firstsince 2006. Alaskans Insitute in 2007. It indicated that for 65% of survey participants, nothing would motivate themWhile this trend is most apparent in rural Alaska, to return to rural Alaska. This is presumably due tothe rising cost of energy is affecting Alaskans in all a lack of real or perceived opportunities for them-regions of the state. Southeast Alaska and Kodiak, selves and their families, which combined with thewhich largely benefit from stable electric costs from high cost of living, reduced the overall attractivenesshydropower, are still being effected by the high cost of their community of origin.of space heating. The Fairbanks area has seen a dra-matic increase in both space heating and electricity In the technology screening database developed ascosts. Even in the Anchorage area average residen- part of this document, the cost-to-benefit analyses oftial natural gas prices increased 27% in one year, energy projects in each community are based solelyfrom 2006 to 2007. While the rising cost of energy on the potential for displacing diesel fuel. There is 28
  • 29. Energy in Alaskano consideration included for the impact of any singleproject on the overall economic health of a commu-nity, such as the potential for new jobs, businesses, orindustries. However, even though the database doesnot quantify those impacts, they exist. Examples in-clude jobs created by harvesting and processing woodfor a biomass energy project, the development of agreenhouse business based on low-cost heat from ageothermal development project and the stabilizationof energy prices through the use of local renewableresources.An energy project could also have a positive im-pact on the social health of a community. Examplesinclude a more stable employment base, educationalopportunities for local students and the perception thatenergy prices are becoming more stable. It is usu-ally the communities that already have strong leader-ship and cohesive social structures that will be mostsuccessful in implementing new projects, and thosecommunities tend to be larger.For more information:Fuel Costs, Migration, and Community Viability Colt,S. and Martin, S., University of Alaska Anchorage, In-stitute of Social and Economic Research, May 2008.Engaging community knowledge to measure progress:Rural development performance measures progressreport Alaska Native Policy Center (September, 2007),Prepared for the Denali Commission, available at 29
  • 30. Energy in AlaskaCurrent Energy Costs and Future ProjectionsCrude Oil and Fuel Products Crude Oil Price ForecastCrude oil is a global commodity, and crude oil prices The U.S. Department of Energy’s Energy Informa-are determined by global supply and demand. Apart tion Administration produces long-term price fore-from an allowance for tanker transportation costs casts in its Annual Energy Outlook. The most recentand quality differentials, it makes sense to speak of publication was June 2008. In the AEO2008 refer-the world price of oil. Alaskans can do nothing to ence case, the world oil price path reaches a low ofimpact this price. $57 per barrel in 2016 and then increases to about $70 in 2030 (2006 dollars).There is no price for Alaska crude oil on the NewYork Mercantile Exchange (NYMEX) or other com- In the high-price case, with the price of importedmodity exchanges. The spot price of Alaska North crude oil rising to $119 per barrel (2006 dollars) inSlope (ANS) crude oil is calculated by subtracting 2030, the average price of U.S. motor gasoline in-a market differential from the price of West Texas creases rapidly to $3.06 per gallon in 2016 and $3.52Intermediate (WTI) quoted on the NYMEX. Four per gallon in 2030. In the low-price case, gasolinedifferent assessment services estimate that market prices decline to a low of $1.74 per gallon in 2016,differential and report a daily spot price for ANS. increase slowly through the early 2020s, and level off at about $1.84 per gallon through 2030 (see Fig-Fuel oil (also often called diesel) is one of several ure 1 on the following page).products distilled from crude oil and used for heat-ing fuel or engine fuel. Alaskans use a number of It is important to note that in the past, EIA forecastspetroleum products, including motor gasoline, diesel have not proven to be overly accurate. This is in partfuel #1, diesel fuel #2, aviation gasoline, and jet because a large number of factors, some unpredict-fuel. Motor gasolines are used in automobiles, small able, can affect crude oil prices on the world, and snowmachines; there are typically threegrades of gasoline available (mostly in larger com- Current Crude Oil Price Trendsmunities in Alaska). Diesel fuel #1 is a kerosene The EIA also publishes the Short Term Energyproduct used for heating fuel. Diesel fuel #2 is a Outlook. The next one will be published in January,light gas-oil used for home and commercial heating 2009. According to the October 2008 report, strongand as a motor fuel. Aviation gasoline and jet fuel global demand and low surplus production capacityare used to fuel aircraft, but a type of jet fuel is also contributed to the run-up to record crude oil pricesoften used for home heating. According to Crowley in July. The current slowdown in economic growthMarine, one of Alaska’s largest fuel distributors, is contributing to the recent decline in oil demandmost of the diesel fuel in more populated areas like and the sharp decline in prices since July. AccordingSouthcentral Alaska and Fairbanks is ultra low sulfur to the December 8 report, the current global eco-diesel. Most villages in Western Alaska still use low nomic slowdown is now projected to be more severesulfur diesel because they are exempt from the ultra and longer than in last month’s Outlook, leading tolow sulfur diesel requirement until 2011. further reductions of global energy demand and addi- tional declines in crude oil and other energy prices. 30
  • 31. Energy in Alaska $140.00 $120.00 $100.00Dollars per Barrel (2006 dollars) $80.00 Figure 1. Energy Infor- $60.00 mation Administration Crude Oil Price Forecast $40.00 $20.00 $0.00 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025 2028 Reference High price Low price $160.00 $140.00 $120.00 Dollars per Barrel (nominal dollars) $100.00 Figure 2. Energy Infor- $80.00 mation Administration Short-Term Crude Oil $60.00 Price Forecast $40.00 $20.00 $0.00 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 May-04 May-05 May-06 May-07 May-08 May-09 31
  • 32. Energy in AlaskaThe monthly average price of West Texas Interme-diate (WTI) crude oil has fallen by more than halfbetween July and November, reflecting the falloutfrom the rapid decline in world petroleum demand.The annual average WTI price is now projected to be$100 per barrel in 2008 and $51 in 2009. The OPECoil cartel met on December 17, 2008 and agreed toreduce production by 2.2 million barrels per day,their largest decrease ever, to boost prices. Whetherall producers adhere to the reductions and whetherthe reductions stem the price slide or raise prices areyet to be seen. Figure 2 on the previous page showsthe EIA short-term price forecast. 32
  • 33. History of Energy Policy in AlaskaA laska has a history of energy planning and poli-cy development dating from statehood in 1959. That in the 1960s. Demand for petroleum products has continued to expand with the introduction of electrichistory still holds some relevance today by demon- utilities and other infrastructure such as schools andstrating both successful and less successful energy water treatment plants.program implementation. This section provides abrief synopsis of past efforts in energy planning and Today most rural communities generate electricityimplementation of those plans, including some of the with centralized diesel systems. Petroleum fuelslessons learned. provide the bulk of all energy for electricity, space heating and transportation. Costs are high due to theOverview of Rural Energy expense of moving fuel to rural Alaska and the small scale of operations. The high costs have motivatedAlthough electricity first appeared in some rural residents to use less and mean rural energy consump-Alaska villages as a result of military, cannery, min- tion is lower than in urban, or logging operations, its introduction into manyvillages began only in the late 1950s as the BIA Rural Energy Policy 1979-1985installed small generators for lighting its schools.1This electricity was not available to households, and In 1979, under Governor Jay Hammond, the statefew villages had central power supplies before the articulated its first energy policy that included themid-1970s. The exceptions were larger rural com- following principles:munities such as Bethel, Nome, Dillingham, andKotzebue. 1) Equitable distribution of Alaska’s energy wealth 2) Improved efficiency of production and deliveryElectrification began to spread more rapidly in 3) State planned and funded facility constructionthe 1970s, but an estimated 85 rural communities, 4) Technical assistance in conservation andmost with less than 200 residents, were still without managementcentral power supply systems in 1975. Over the 5) Support for development of locally orientednext 10 years the state provided local communities a energy technologieslarge number of grants for electrification, and by the 6) Public participation and local input in energymid-1980s most remote communities had centralized planning decisionsdiesel power facilities. Several conditions at the start of the 1980s heavily influenced development of this energy policy. ThisThe demand for diesel and other petroleum products included the concept that developing cheap power,in rural Alaska originated with the introduction of primarily through investment in hydropower projectsoutboard motors in the 1940s and snowmobiles in such as Susitna and Bradley Lake as well as variousthe 1960s. This demand expanded when the BIA and projects in Southeast Alaska, would stimulate eco-Alaska State Housing Authority began constructing nomic development. It was also assumed that stateconventional western housing in rural communities revenues from the newly producing oil field at1. This historic account through the 1990s is partially extracted from Scott Goldsmith, Short (and Informal) Review of AlaskaRural Energy Policy, with Particular Reference to Alternative Technologies, prepared for the Denali Commission, May 24, 1999. 33
  • 34. History of Energy Policy in AlaskaPrudhoe Bay could provide the money needed to (peat, biomass, solar, wind, geothermal, tidal, hydro-bankroll these huge investments. The high price of gen, fuel cells, heat pumps, and waste heat recovery)oil and the expectation that it would continue to rise that the division would be investigating in the hopealso led to the assumption that there would be no that some would be appropriate for rural Alaska.shortage of money. (In 2008 dollars the 1981 price ofcrude oil was close to $60 per barrel) By the time the 1982 plan was written, the Division of Energy, together with the Alaska Power Authority,Of particular importance to rural communities were had spent $12.6 million on geothermal, wind, wood,the following considerations: peat, single-ground-wire transmission, waste heat, • A way to spread the wealth from oil to all weatherization, organic rankine generators, and tidal residents would be to make electricity available energy. The state departments of Transportation and and cheap for all Alaska communities, including Public Facilities and Environmental Conservation those in the bush. also conducted alternative energy studies. Hydro- electric studies fell into their own category.• The high price of crude oil meant that the price of diesel fuel, the source of most of the energy for The progress of those investigations can be traced rural Alaska, was oppressively expensive - through the early 1980s by reference to each suc- particularly in relation to costs in urban areas. ceeding State Long Term Energy Plan. These docu- Many urban places were somewhat insulated by ments reflect the evolution of policy over time, existing hydro facilities or by availability of partially through changes in administrative structure, natural gas, which was not tied to the price of oil. and tend to be forward looking. Consequently, they• The fear of oil embargoes gave rise to the idea include only a limited amount of information about of self sufficiency of energy supply, which meant the successes, failures, and lessons learned from the use of locally available sources of energy money spent on existing projects, including invest- rather than the use of imported diesel. ments in alternative energy.• The national initiative to develop alternative What Did The State Learn About Rural Energy? energy and implement conservation measures After gaining experience with renewable resource meant that a lot of money from the federal gov- exploration and development in the early 1980s, sev- ernment was available to consider alternative eral conclusions were reached. These included: means of providing electricity in rural Alaska. Resource Assessment:In 1980 the state began spending large amounts of • Geothermal resources are site specific and ex-money collecting data on energy resource avail- pensive to developability and energy use, conducting studies of hydro • Wood is an excellent substitute for fuel oilpotential and investigating the potential for alter- • Alaska has vast resources of peat, but technicalnative energy sources, particularly for the state’s expertise and infrastructure for its economicalsmaller communities. For example, the 1981 State use are not in placeLong Term Energy Plan (the first of six such plans) • Wind resources need more studydescribed the activities of the newly formed Divi- • Seasonal fluctuations restrict the viability ofsion of Energy within the Department of Commerce. solar powerProminent was a list of the alternative energy sources • Tidal power has limited applicability 34
  • 35. History of Energy Policy in AlaskaTechnology Options: According to the 1986 plan, little progress in en- • Diesel generators will remain the dominant ergy diversification in the bush had been made since option due to their appropriate scale, reliability, 1979. The only projects that had been implemented and minimal maintenance requirements. Im- were a number of wind generators. In reference to provements in diesel-operating efficiency offer those installations, the 1986 plan concluded that one promising strategy for addressing the prob- wind power could be both technically and economi- lem of high energy costs in the bush. cally feasible and yet still fail because of improper management, logistical problems (distance from sup- • Small hydro and wind projects may be attractive pliers and qualified technicians), or lack of an opera- on a site-specific basis. (Thirty-four wind tions and maintenance network. turbines were identified as in operation in 1982) • Extensive, long-distance intertie systems are 1985 Review of Energy Policy probably not economic. By 1985, concern within the Alaska Legislature on the direction of the state rural energy program led to • Fuel cells may prove promising, but they were a review and analysis by the legislature’s research expensive and not commercial. They have some agency (House Research Report 85-C). The review potential advantages including efficient fuel use, concluded, among other things, that: modular design, (theoretically) simple operation, excellent load-following capability, and minimal • State loans and grants to rural utilities for environmental impact. diesel generation systems flourished in the late 1970s and early 1980s.The 1983 report, written by Arthur D. Little, foundthat “generally it is either technically difficult or • Numerous alternative energy demonstrationuneconomic to alter the dependence of Bush com- projects were begun in the late 1970s in hopesmunities on oil. Many alternatives, while attractive that they would eventually provide replacementson the drawing board, experience operation and for rural diesel generation.maintenance problems which quickly negate any • The state established a power rate subsidy pro-cost savings. Reliability and simple technology are gram in 1980 as an interim measure, until atherefore essential.” long-term alternative energy solution could be found for high rural power costs (a.k.a. the PCEThe energy plans for 1984, 1985, and 1986 have less Program which is still in place today).to say about alternative energy for rural Alaska forseveral reasons. Early enthusiasm for alternative • Disenchantment with the general lack of successenergy sources to generate electricity was dampened of alternative energy projects and the perceptionbecause these alternatives did not hold up under of disorganization led to the demise of theinvestigation either because they were technically Division of Energy and Power Development inor economically infeasible or they did not work in 1983.operation. Additionally, and more importantly, the • As results from alternative energy projects andprice of oil, and consequently the relative price of village reconnaissance studies were made pub-electricity generated by diesel in the bush compared lic, many people began to realize there wereto alternatives, was falling. This also resulted in the no realistic alternatives to diesel power genera-federal government losing interest in funding alter- tion in many rural communities.native energy as the national oil crisis dissolved. 35
  • 36. History of Energy Policy in AlaskaThe report quoted one state analyst’s perspective The Review concluded that since the state’s energyon the reasons for the failure of alternative energy policy was largely driven by the desire to share theinitiatives. The analyst’s observation was that wealth from oil, much of the money had not beenbureaucracy is not good at choosing winners and los- spent wisely.ers. The marketplace is better for determining whichalternatives are most appropriate. Specific factors Specific criticisms of state energy policy as it wasthe analyst mentioned were: state agencies did not implemented included:develop strong management capabilities; they lackedmethods for assessing the technical and financial • Most of the focus had been on electricity, whichfeasibility of projects; coordination among state is only a small part of the total energy require-agencies was often lacking; features of an alternative ment of rural were often poorly matched with a use- • Benefits were distributed inequitably, with theful rural application; unrealistic expectations existed better organized communities getting the lion’sabout what an agency or technology could accom- share of the benefits in a ‘survival of the fittest’plish; and too much responsibility was delegated to while the state often assumed the risk inthe performance of the project. When considering • The rural energy problem is not one of high cost,the current (2008) RE Fund, the system of competi- but rather of low cash income to pay for energy.tively and rigourously vetted proposals will hopeful-ly mitigate some of the concerns expressed regarding 1990s Energy Policythe failed programs initiated during the late 1970sand early 1980s. In 1986 the state slipped into a recession because of declining oil prices and the state started reducing itsDiffering opinions on the role of the state in devel- budget. Energy policy initiatives were reduced, andoping renewable energy projects was also expressed most state effort went into the maintenance of exist-in the 1985 Review. In particular, Neil Davis of the ing projects and programs. By the early 1990s theUniversity of Alaska Fairbanks felt that the state large hydro projects for urban and maritime Alaskahad given up too soon on research into alternative and Railbelt interties had been completed, and thetechnologies, particularly considering the amount Power Cost Equalization program for rural utilitiesof money it was spending to develop other energy had been established. The Healy Clean Coal Plantresources. was built in 1998, but with the exception of a brief test period, it has not been commercially operated.The 1985 Review estimated that from 1975 to 1985the state had spent $1.7 billion on energy programs. Attention in urban Alaska, particularly in the Rail-This included $720 million on urban hydro; $93 mil- belt, was centered on the introduction of competitionlion for grants and loans for rural electricity genera- in electricity sales, construction of interties, and find-tion and distribution; $27 million in the search for ing alternatives to Cook Inlet natural gas as it beganalternative sources of energy (hydro, geothermal, to decline. State electricity policy for rural Alaskacoal, and gas); and $24 million in research and pilot during this period is reflected in the programs of theprojects related to wind, wood, solar, single-wire- Alaska Energy Authority, Office of Rural Energyground return, biomass, and waste heat recovery. (previously the Division of Energy of the former Department of Community and Regional Affairs). 36
  • 37. History of Energy Policy in AlaskaAfter the large effort that went into wind demonstra- power facilities, and coal bed methane development.tion projects in rural Alaska in the early 1980s notone of them remained in service by the early 1990s. For the Copper Valley, Kodiak, and Southeast Alas-This was due primarily to immature technology ka, the focus was on a piped natural gas or propanecoupled with a lack of continued maintenance as distribution system to Southeast Alaska, and onfederal tax incentives expired. However, a new gen- interties, including construction of the Swan Lake–eration of improved wind turbine technology began Tyee Lake intertie, the Juneau-Greens Creek-Hoonahto be tested in Kotzebue, a relatively large rural hub intertie, and the Kake-Petersburg intertie.village, and Wales, a very small community. Bothcommunities were using new technology that was As was true of past state energy policy, the Taskmore reliable than what was used in the 1980s, and Force’s work product was primarily focused on elec-more suited to withstand arctic conditions. Today, tricity and on grants and loans for the construction ofKotzebue is still the leader in wind technology with new generation and transmission infrastructure.the most installed capacity of any community, ruralor urban, in the state. Kotzebue Electric Association Concurrent to the Statewide Energy Issues Overviewnow has twelve 65 kW AOCs, one 100 kW North- was the development of the 2004 Rural Energy Plan.wind 100, and one 65 kW remanufactured Vestas. The Plan recommended a combination of utilityThese units currently supply about 7% of Kotzebue’s management best practices, investments in commer-electrical requirements annually. cially available, cost-effective production and end- use technologies, and the fine tuning of the power cost equalization incentive structure. It estimated2000 to Present those changes could increase rural energy efficiency by as much as 20% over the next 15 years, comparedState energy policy early in this decade is reflected in to current practices. The Rural Energy Plan alsothe 2003 Statewide Energy Issues Overview, a prod- suggested investing approximately $65 million foruct of the Alaska Energy Policy Task Force. The energy efficiency over five years, an investment theTask Force was established under House Concurrent Plan estimated could produce benefits on the order ofResolution No. 21 (HCR 21). The sunset date for $78 million over fifteen years.the Task Force was April 15, 2004. The Task Forceexamined how electricity is generated, transmitted, The Plan also provides guidance to AEA and theand distributed in Alaska in order to meet the State’s Alaska Village Electric Cooperative (AVEC) forexisting and future electrical needs in a safe, reliable, upgrading the following programs: Rural Powerand efficient manner. It was tasked to develop a System Upgrades, Bulk Fuel Upgrades, Power Costlong-term Energy Plan for Alaska that would en- Equalization (PCE), Alternative Energy and Energyhance the State’s economic future. Efficiency, and training. Currently rural Alaska utili- ties, schools, and residential households account forFor the Railbelt, the primary projects identified were about $170 million in annual energy expendituresa retrofit to the Healy Clean Coal facility, the Emma (utility payments for fuel and non-fuel costs; schoolCreek (coal) Energy Project near Healy, expansion payments for heating fuel and electricity; residentialof the GVEA North Pole power plant, construction household payments for heating fuel and electricity;of the Sutton-Glennallen intertie, reconstruction of PCE payments to utilities).the Anchorage-Kenai intertie, upgrades of military 37
  • 38. Current Energy Policy and Planning in AlaskaIn the last couple of years, attention to energy issues Also in 2008, the Alaska Legislature established thehas increased significantly with the dramatic increase Renewable Energy Grant Program under HB 152,in world oil prices, which has simultaneously raised to be administered by the Alaska Energy Authority.the cost of energy use for Alaskans and swelled state The Fund established funding for renewable energycoffers with increased petroleum revenues. After projects over a period of five years at a level of $50peaking at over $140 per barrel in July 2008, prices million per year, although each year’s appropriationcollapsed to under $50 per barrel by December 2008. is subject to legislative approval. In 2009, lawmak-While the price decline provides some relief to urban ers approved $50 million to fund the program duringand ice-free areas of the state, it provides no such the regular legislation session, and added an addi-relief to parts of rural Alaska that were forced to tional $50 million during a special session for a totalpurchase winter fuel before fall freeze-up. For those appropriation of $100 million available during Fiscalcommunities there is no potential relief until the Year 2009.spring of 2009. House Bill 152 also established a seven memberIn June, 2008, the Cold Climate Housing Research advisory board with a mandate to ‘consult with theCenter published a report outlining energy efficiency Alaska Energy Authority as it develops eligibilitymeasures that can be implemented as part of the criteria for grants from a renewable energy grantState Energy Plan. The report focuses on programs fund, develops methodology for determining thethat address end-use energy consumption in space order of projects that may receive grants from thatheating and the electrical needs of residential and fund, and adopts regulations identifying criteria tocommercial users, with a focus on the Railbelt. The evaluate the benefit and feasibility of projects seek-recommendations are broken into nine categories. ing legislative support’.For a more detailed description of those recommen-dations, please see the Alaska Energy EfficiencyProgram and Policy Recommendations section ofthis report or refer to the original document. Summary of proposals submitted un- der the first round of the Alaska Re- newable Energy Fund (2009). This does not include round 2 proposals. 38
  • 39. Current Energy Policy and Planning in Alaska Steps to Successful Implementation of Renewable Energy Grant Fund LABOR Resource Technology Technology Teams Economic Comparison Renewable Energy Fund AEA Round 1 Current Progress (January, 2009) Least Cost Plan/ IRP Renewable Energy Fund Applied R&D Researchers Feasibility Round 2 UA ACEP Champion Community/ Regional Plan Community Selection Champion Legislative Designers Vision/ Planning Financial Task Force Legislature Alternatives Administration Energy Projects RFA Proposal Renewable Energy Fund Cost Sharing Philosophy Business Round 3 Grant Writers RFA Evaluation Financial Vehicle Evaluators Development RFA Selection Evaluators Advisory Committee Management Permitting/ Licensing Contract with Vendors Financing RCA oversight for IPPs Project Team Grants/ Debt Craft Labor Construction Grant Administration Lender Programs PM/CM Cost Audit State/ Banks State / Bankers Champion Operations Community Cost Audit 39
  • 40. Current Energy Policy and Planning in AlaskaAlaska Railbelt Electric GridAuthority (REGA) StudyWith recognition of the changing regional conditions • Path 3 – Form an entity that would be respon-facing the Railbelt, the Alaska Legislature recently sible for independent operation of the grid andrequested a study to assess whether reconfiguring the regional economic dispatch. This Path would ex-electric generation and transmission elements of the pand coordination in Path 2 through the formation ofRailbelt region would produce benefits in terms of an organization that would be responsible for the jointcost, efficiency, and reliability. The contractors for economic dispatching of all generation facilities in thethe study evaluated five paths for potential reorga- Railbelt. This Path, as well as the following two, willnization and tested those paths under four potential require some additional investment in transmissionscenarios for meeting electric power demand. transfer capability and supervisory control and data ac- quisition (SCADA)/telecommunications capabilities.The following descriptions of Organizational Paths 2, This Path, and the following two Paths, would also3, 4, and 5 focus on the functional responsibilities of require the development of operating and cost sharinga new regional entity. In each case, the new regional agreements to guide how economic dispatching wouldentity could be a Joint Action Agency (JAA), genera- occur, and how the related costs and benefits would betion and transmission (G&T) Cooperative, or State allocated among the six Railbelt utilities.Agency/Corporation. • Path 4 – Form an entity that would be responsi-• Path 1 – Status Quo. This path assumes that the ble for independent operation of the grid, regionalsix Railbelt utilities continue to conduct business es- economic dispatch, regional resource planning, andsentially in the same manner as now (i.e., six separate joint project development. This Path is similar toutilities with limited coordination and bilateral con- Path 3, except the scope of responsibilities of the newtracts between them). It does not include the potential regional entity would be expanded to include region-impact of the proposed ML&P/Chugach merger. This ally integrated resource planning and the joint projectis, in essence, the Base Case and the other Paths are development of new generation and transmission as-compared to this Path for each of the evaluation sce- sets.narios considered. • Path 5 – Form a power pool. This entity would• Path 2 – form an entity that would be respon- be responsible for the independent operation ofsible for independent operation of the Grid. On this the transmission grid, regional economic dispatchPath, a new entity would be formed to independently and regional resource planning. In that sense, it isoperate the Railbelt electric transmission grid. Cur- similar to Path 4, except that the individual utilitiesrently, the Railbelt utilities have three control centers would retain the responsibility for the development(GVEA, Chugach, and ML&P). The operations of of future generation and transmission facilities.these centers are coordinated (but generation is notfully economically dispatched on a regional basis) The study also considered four potential electricthrough the Intertie Operating Committee. This new portfolio scenarios to test how, under each, theentity would not perform regional economic dispatch, organizational scenarios would fare. However, thejust the independent operation of the Railbelt trans- contracting firm reiterated that it was not tasked tomission grid. 40
  • 41. Current Energy Policy and Planning in Alaskachoose a generation scenario, and none of the sce- • Scenario B – The Natural Gas Scenario assumesnarios was based on an in-depth integrated resources that all of the future generation resources will beplan (IRP). The study concluded that any of the natural-gas-fired facilities, continuing the region’spaths could be achieved under any of several poten- dependence upon natural gas.tial portfolio scenarios, such as: • Scenario C – The Coal Scenario assumes that the• Scenario A – The Large Hydro/Renewables/ central resource option is the addition of coal plantsDSM/Energy Efficiency Scenario assumes that the to meet the future needs of the region.majority of the future regional generation resources • Scenario D – A Mixed Resource Portfolio Sce-that are added to the region include one or more nario assumes that a combination of large hydroelec-large hydroelectric plants (greater than 200 MW), tric, renewables, DSM/energy efficiency programs,other renewable resources, and demand side manage- coal and natural gas resources is added over the nextment (DSM) and energy efficiency programs. 30 years to meet the future needs of the region. 41
  • 42. Current Energy Policy and Planning in AlaskaState Policy on Criteria forProject FeasibilityHistorically, the primary criteria the state has used operate and maintain them together, and location andto evalaute an energy project have been the project’s human resource feasibility must be considered.technical and economic feasibility. These are gener-ally still the explicit tests of a project. Economic feasibility has consistently been an il- lusive and controversial topic for Alaska energyTechnical feasibility means technically feasible given projects. This stems from the focus on electricAlaska’s temperature, wind, and other conditions; power generation and transmission projects and theirconsequently it is inappropriate to adopt a technology tendency to have project economic analyses withthat is technically feasible elsewhere without testing it benefit-cost ratios below 1.0 (the benefit-cost ratio ishere. Economic feasibility is usually based on life-cy- equal to the net present value of a project divided bycle costs over 30 years compared to those of the next the project’s capital cost). This is because of the lowbest alternative, usually diesel when analyzing rural price of Cook Inlet natural gas, high capital costs,energy projects. and limited rate payer market base. The conse- quence is that projects considered in the 1980s wereTwo other important feasibility criteria for rural shelved when oil prices declined, and resurrectedAlaska are location feasibility and human resource during oil price spikes.feasibility. Location feasibility is the support infra-structure in place in the community to deal with the In rural Alaska, PCE provides rate relief but uninten-normal but unanticipated situations that arise over tionally removes some of the market incentives forthe life of a facility. Rural Alaska communities have local utilities and rate payers to improve the efficien-limited access to an inventory of spare parts or tech- cies of their utilities or invest in energy conserva-nical expertise in the event of a breakdown. Human tion. Given the small number of rate payers and theresource feasibility is the technical, managerial, and high proportion of utility fixed costs, conservationadministrative support within the community to take measures tend to benefit the state of Alaska throughcare of the equipment. The importance of location reduction in PCE payments more than they assistfeasibility and human resource feasibility has not yet ratepayers and utilities.been documented for rural Alaska electricity projects.For example, because of today’s improved technology A central challenge for both urban and rural projectwind generation would seem to be an ideal choice for economic feasibility analyses is assumptions regard-parts of rural Alaska with excellent wind resources. ing future crude oil and thus diesel and natural gasHowever, wind generation must be used in conjunc- prices. Those prices are at the heart of any com-tion with either a diesel system and/or batteries that parison of the status quo to alternative projects. Asupply the electricity when the wind is not blowing. comprehensive review1 was recently completed on aThus a simple solution rapidly becomes more com- number of theories of what produced the high priceplicated by the need to integrate technologies and of oil in the summer of 2008, including commodity 1. Hamilton, James D., Understanding Crude Oil Prices, prepared for National Bureau of Economic Research, NBER Work- ing Paper No. 14492, November 2008. This highly recommended paper can be found at: 42
  • 43. Current Energy Policy and Planning in Alaskaprice speculation, strong world demand, time de- In other words, all of these factors contributed to pricelays or geological limitations on increasing produc- fluctuations and are likely to continue to do so. Thistion, OPEC monopoly pricing, and an increasingly suggests that when screening projects for their poten-important contribution of the scarcity rent (growth tial to lower the cost of energy, an average price of oilin prices due to scarcity in petroleum reserves and should be used: over the course of the project’s usefulproduction). The study focused on our inability to life it is likely to be both more and less expensive thanforecast crude oil prices. ISER tested the statistical its natural gas or diesel alternative. However, scarcitybehavior of oil prices, related these to the predic- is likely to keep fossil fuel prices trending upwardtions of theory, and looked in detail at key features without a significant destruction in world demand.of petroleum demand and supply. The study con-cludes that future oil prices are at best very difficult What is certain is that Alaska’s oil production isto predict. For example, using historic oil prices and declining and thus so are future state revenues.a first quarter 2008 oil price of $115 per barrel, a Competition for state funding will increase and theprediction of the second quarter 2008 oil price within opportunity costs of building uneconomic projectsa 95% confidence interval ranged from $85 to $156 will increase. Similarly, the opportunity costs of notper barrel. Statistically the same forecast projected completing projects with benefit-cost ratios aboveout four years would give a 95% confidence interval 1.0, such as those identified in the 2004 Rural Energyfor oil prices being as low as $34 or as high as $391 Plan, also increase. Real capital costs for building anyper barrel. projects are also likely to continue to increase with an increase in fossil fuel prices, as commodity prices forWhen investigating the causes of the 2008 price run construction materials such as steel and concrete trendup, the three key features identified as unquestion- upward along with oil and gas prices.ably important are the low price elasticity of demandfor petroleum products, the strong growth in demandfrom China, the Middle East, and other newly in-dustrialized economies, and the failure of global oilproduction to increase. These facts explain the ini-tial strong pressure on prices that may have triggeredcommodity speculation in the first place. Specula-tion could have edged producers like Saudi Arabiainto the discovery that small production declinescould increase current revenues and may be in theirlong-run interests as well. And the strong demandfrom emerging economies may be initiating a regimein which scarcity rents, while negligible in 1997,became perceived as an important permanent factorin the price of petroleum. 43
  • 44. Policies with Energy ImplicationsFuel Stabilization dictability of fuel costs will allow the utilities and school districts to tend to the long-term needs of theirThe Alaska Power Association (APA), the trade as- customers and constituents rather than dealing withsociation for Alaskan electric utilities, has hired Steve the immediate financial crises.Pratt to investigate opportunities to stabilize fuel costs.With the recent reduction in crude oil prices an oppor-tunity exists to lock in to these low prices using estab- Power Cost Equalizationlished financial derivative and hedging transactions to Since 1980, programs (i.e., Power Production Coststabilize the net cost of fuel. Assistance and Power Cost Assistance) have beenThe focus of this study was directed to the fuel pur- enacted by the legislature to assist citizens of thechases for electric utilities and school districts as the state burdened with high power costs. The Powerlarger commercial purchasers of fuel in rural Alaska, Cost Equalization program (PCE), which becamebut could be applied to other fuel use sectors. Essen- effective in October 1984, is the latest effort aimedtially, the utilities or school district commits to pay an at assisting Alaska consumers faced with extremeagreed upon price for fuel delivered at a specific future electric costs. The PCE program provides economicdate – once committed, that price never fluctuates, assistance to communities and residents in rural ar-regardless of what happens to market prices for petro- eas of Alaska where, in many instances, the kilowattleum products during the interim. hour charge for electricity can be three to five times higher than the average kWh rate of 12.83¢ (JulyBecause this price insurance allows the user to lock 2007) in Anchorage, Fairbanks, or Juneau.into a fixed price, it removes the risk of the fuel priceincreasing. However, it also removes the cost reduc- The PCE program was established to assist ruraltion if fuel drops to a lower price. This is the trade-off residents at the same time that state funds were usedof fuel insurance, and is a risk determination that each to construct major energy projects to assist urbanparticipant must weigh and evaluate before commit- areas. Most urban and road-connected communitiesting to this program. were benefiting from major state-subsidized energy projects such as the Four Dam Pool, Bradley Lake,Under the APA proposal the program would be gov- and the Alaska Intertie. To help spread benefits toerned by an oversight board and administered by the more remote communities, power cost equalizationAlaska Power Association. APA would contract for funds are distributed to eligible utilities, which inservices of a Program Director/Manager who will turn reflect the state payment by lowering monthlydesign, budget for, implement and operate the pro- bills to individual customers. The program insuresgram, assist and educate participating organizations, the viability of the local utility and the availabilityand provide continually updated information about the of central station power. The PCE Endowment Fundmarket place risks and opportunities. was created and capitalized in FY 2001 with funds from the Constitutional Budget Reserve and pro-This program is designed to provide short-term (roll- ceeds from the sale of Four Dam Pool Project. Theing 1-3 years) fuel cost certainty for participants. A fund was further capitalized in FY2007 with generalthree-year look ahead position would provide price funds and now totals around $280 million.certainty and allow for accurate fuel budgeting. Pre- 44
  • 45. Policies with Energy ImplicationsEligibility and monthly PCE payment amounts are tive was removing commercial consumers from par-determined by formula specified in state statute (AS ticipation in the program. In addition, a mechanism42.45.110-150). The primary formula variables was put in place to allocate dollars across customersinclude: if the annual appropriation was insufficient to fully fund the program. 1) the number of eligible kWh (up to 500 for residential and 70 per community resident per During FY07, approximately 78,500 Alaskans living month for community facilities) in 183 communities participated in the program at 2) the maximum per kWh power cost (52.5 cents) a cost of $25.4 million. Total utility costs for the 3) the minimum per kWh power cost period were $142.7 million, so PCE covered approx- (12.83 cents) imately 17.8% of utility costs. Despite the growth in 4) the percentage of actual costs in excess of the the number of utilities and customers, nominal pro- minimum, but less than the maximum gram costs and average disbursements per customer (95 percent) were lower in most years since FY87. This shifted in FY06 and FY07 with rapidly increasing fuel costs.A formula is used to determine PCE levels that In real dollars, program costs and per customer dis-represents 95% of a utility’s costs between the floor bursements have declined.(12.83 cents per kWh) and the ceiling (52.5 cents)If the eligible costs are more than 52.5 cents/ kWh, The PCE program only pays a portion of approxi-then PCE level is 37.69 (52.5 – 12.83 = 39.69 cents mately 30% of all kWhs sold by the participating/ kWh x 95% = 37.69 cents). The base may vary on utilities, and household electricity usage is lower inannual basis per AS 42.45.110(c)(2). PCE communities.As a result of increases in the number of utilities par-ticipating, changes to the subsidy formula, rising oil Average kWh Usage per householdprices, and increased population, payments under the PCE communities: 412 kWhrprogram grew from $2.2 million in fiscal year 1981 Anchorage: 725 kWhr(FY81) under the power cost assistance program, to National Average: 750 kWhrapproximately $17.7 million in FY87. In FY88, 102utilities serving 170 communities and 24,455 cus-tomers in rural Alaska were eligible to participate. The Regulatory Commission of Alaska determinesThe average disbursement was $686 per customer. the PCE level for each utility based on fuel and non-fuel expenses such as salaries, insurance, taxes,In the late 1980s, AEA expected the PCE program to interest and other reasonable costs. AEA administersgrow at seven percent annually. As a result, the leg- the PCE fund based on appropriation by the legis-islature changed the formula by lowering the num- lature, monthly reports submitted by participatingber of kWhs eligible per customer from 750 to the utilities, and eligibility determination.current 500 kWh per month. The minimum per kWhpower rate floor was also raised from 8.5 cents to 12cents and was to be adjusted as the average cost inAnchorage, Fairbanks, and Juneau changed. Proba-bly the most significant change from a fiscal perspec- 45
  • 46. Policies with Energy ImplicationsWind Power and other Alternative Energy Im- EPA rules currently mandate the use of ultra-lowpacts on PCE Rates sulfur diesel (ULSD) for on-highway mobile sourcesAccording to AEA, rates are affected only if wind with diesel engines such as automobiles. Similaror alternative energy generation reduces a utility’s rules will take effect for construction equipment, lo-costs. While there are no implicit incentives in PCE comotives, boats, and ships, and similar off-highwaylegislation for renewable energy, there is the eco- equipment in 2010. The rule for stationary enginesnomic incentive to keep a downward pressure on applies to new, modified, or reconstructed internalutility costs and subsequent costs to customer. The combustion engines used for power generation andgreatest incentive is if customers consume more than to industrial pumps starting with model year 2011the 500 kWh program maximum or if the utility’srate is above or close to the 52.5 cent program maxi- Under the EPA rules for Alaska, rural areas canmum rate. continue to use uncontrolled-sulfur-content diesel for all uses and are not required to carry multiple gradesHowever, because of the state’s role in funding PCE, of fuel until 2010. However, as of June 1, 2010 allwhich makes it a de facto ratepayer, the state has an areas of Alaska, rural and urban, will begin the tran-incentive to invest in alternative energy that lowers sition to ULSD for highway and non-road, locomo-the cost of the PCE program. In addition to direct tive, and marine diesel benefits, alternative energy and energy effi-ciency displacing diesel fuel reduces the risks of fuel As noted above, the new EPA USLD rules will notspills and greenhouse gas emissions. be implemented for all fuels and for mobile, station- ary, on- and off-road uses simultaneously. There-Wind power will not completely displace diesel, fore, compliance can occur gradually in concert withbut it can reduce fuel consumption. For example, the regulation dates. These would require additionalin 2007 Kotzebue reduced diesel consumption by fuel segregation by use, or the shift can be made at100,000 gallons, saving the community an estimated the earliest compliance date for all fuel uses to avoid$450,000. Kotzebue now gets 7% of its energy from additional storage costs. ULSD is usually morewind and hopes to reach 20% in the next several expensive per gallon so there would be higher fuelyears. Similarly, the fuel cost per kWh is 25% less costs for the one-time shift to ULSD. To deter-than it would have otherwise been in the five com- mine the lowest cost option for rural households, anmunities served by wind projects in Tooksok Bay analysis was completed2. It found that the cost isand Kasigluk. lower to make one rapid transition, because the cost of segregating relatively small quantities of ULSDUltra-Low-Sulfur-Diesel is higher than using ULSD for all uses, even before the required transition date for that use. However,In response to health concerns related to chemical the study concluded that even an efficient and rapidand particulate matter in diesel exhaust, the Environ- transition to ULSD will incur significant costs for ru-mental Protection Agency (EPA) enacted stringent ral households in the study area, on the order of $190standards for new diesel engines and fuels1. per household per year or roughly $16 per month. 1. Much of the following text is taken directly from a report published by the Alaska Department of Environmental Conser- vation. Available at: 2. Study completed by Northern Economics 46
  • 47. Policies with Energy ImplicationsCarbon Tax or According to an Alaska Department of Environmen- tal Conservation (DEC) 2008 report, the principalCarbon Cap and Trade source of Alaska’s GHG emissions is residential, commercial, and industrial (RCI) fuel use, account-According to 2005 Energy Information Administra- ing for 49% of total state gross GHG emissions intion (EIA) figures, Alaska consumes 40% more fuel 2005. Nearly 85% of the RCI fuel use emissions areper capita than any other state and more than three contributed by the industrial fuel use subcategory,times the national per-capita average. This is due to approximately 42%. Based on estimates of emis-a number of factors including Alaska’s remoteness; sions from large facilities, the oil and gas industrycold climate; scattered communities and population; appears to be a key industrial source of greenhouselimited road system and resulting dependence on air gas emissions.and ferry travel; status as a major world air cargohub; and oil production, transportation and refin- Transportation sources accounted for approximatelying. As a result, measures to decrease greenhouse 37% of the gross GHG emissions in Alaska, withgas (GHG) emissions such as cap and trade, carbon jet fuel consumption the largest share. Commercialtaxes, or other remedies can be expected to impact aviation accounts for 96% of aviaton’s contribution;Alaska residents and businesses especially hard. international aviation as a sub-division of commer- cial aviation appears to be a large GHG emissionAccording to the International Panel on Climate source and may account for roughly 60% of theChange, the most important naturally occurring emissions from aviation sources, largely due to theGHGs associated with this phenomenon are water role of international cargo at the Anchorage Interna-vapor (H2O), carbon dioxide (CO2), methane (CH4), tional Airport. In 2006, NASA and FAA conductedand nitrous oxide (N2O). To address these issues, a joint workshop with atmospheric and aviationin 1999 the U.S. Department of Transportation the experts on the impacts of aviation on climate changecreated the Center for Climate Change and Fore- and priorities for future research. They concludedcasting (CCCF), and numerous investigations into that the effects of aircraft emissions on the currentaddressing transportations climate change impacts and projected climate of the planet may be the mostwere initiated. According to the U.S. Environmental serious long-term environmental issue facing theProtection Agency’s Transportation GHG Emis- aviation industry.sion Report, CO2 accounted for 85% of the radiativeforcing effect of all human-produced GHGs in the Alaska Department of Environmental ConservationUnited States in 2003. This proportion is higher for green housegas emission estimates are given in Mil-transportation sources, with CO2 representing about lion Metric Tons of CO2 equivalents (MMtCO2e) in96% of the sector’s GWP-weighted emissions. In Table 1 (on the following page). Industry and trans-2003, U.S. transportation sector derived all but 1% portation account for over 80% of Alaska’s estimatedof its energy from fossil fuels, 97% of which was GHG emissions. Eity production and residential andpetroleum. commercial uses each account for approximately 7% each. 47
  • 48. Policies with Energy Implications Source: EIA,
  • 49. Policies with Energy Implications Source: EIA, 49
  • 50. Policies with Energy ImplicationsIn order to reduce greenhouse gas emissions, a a voluntary program that links renewable energy pro-national carbon tax or a carbon cap and trade pro- ducers with other individuals on the GVEA grid whogram may be created in the near future. Both systems are willing to pay a premium for that power. SNAPwould effectively increase the cost of using fossil producers pay to install their own renewable powerfuels, although the cost of all fossil fuels will not systems and feed that power onto the grid. Theyincrease by the same amount. The tax will be on the are paid a premium for this ‘green’ power by vol-carbon dioxide released when the fossil fuel is used. untary contributions from other GVEA ratepayers.As a result, low-carbon-intensive fuels like natural At the end of 2008, there were 27 renewable energygas will be taxed about half as much as coal. (Table producers and 574 members contributing a total of2 on the previous page shows the carbon content of $36,120 annually.fossil fuels)A carbon tax or a cap and trade system would in- Land Usecrease the cost of using fossil fuel energy, increasingthe economic benefits of renewable energy projects. Land use policy in Alaska is primarily addressed atThe actual increase of the benefits of renewable en- the local government level and, among other things,ergy projects is dependent on the size of the carbon can dictate the placement of buildings and homestax and the type of fossil fuel replaced. within a community. Indentifying energy efficient land use policy can be one way to reduce the energy needs of a community. For example, in urban com-Net Metering munities, land use policy can promote sprawl by lack of zoning or zoning for single use and low densityNet metering is a policy whereby consumers who neighborhoods. This sprawl creates increased de-own small renewable energy facilities such as wind pendency on automobile use and results in increasedor solar power systems can use their own generation energy offset their consumption over a billing period.They do this by allowing their electric meters to turn In rural Alaska, land use policy can be used tobackwards when they generate electricity in excess encourage building placement that increases energyof their demand. This offset means that customers efficiency by increasing the potential for and benefitsreceive retail prices for the excess electricity they of cogeneration. Building a community facility neargenerate. Net metering is currently offered in 42 a cogeneration power plant enables use of wastestates plus the District of Columbia. Net metering is heat and reduces the energy lost during the transmis-being considered by the RCA (Docket R-06-5), and sion of the heat, whether through hot water lines orby the Alaska Legislature under (HB 288). Concerns through a direct heating loop.have been raised in Alaska regarding the burdenthat a mandated net metering program could createfor small utilities with high fixed costs and a small Transportationcustomer base. The transportation industry is a relatively largeAs an alternative to net metering, Golden Valley sector of the Alaska economy. Tourism and interna-Electric Association instituted the Sustainable Natu- tional air cargo are both fuel intensive industries thatral Alternative Power (SNAP) program in 2004, are part of the transportation sector. Also, the cost of 50
  • 51. Policies with Energy Implicationstransportation increases the cost of living in Alaska per gallon (mpg) by 2020. AASHTO’s Vision Reportbecause of the state’s remoteness. Alaska is remote calls for doubling the CAFE standard by 2020 to 42from global markets and population centers, and mpg. Europe today averages 40 mpg versus the UScommunities and industries are remote from markets at 21 mpg.and population centers within the state, thus requir-ing greater use of air transportation. This remote- In addition to increasing fuel efficiency, the policyness increases the cost of getting goods and people goal is to reduce the vehicle miles traveled (VMT)to and from the state, making the Alaska economy growth rate by 50% (instead of 2.2% growth annu-especially susceptible to transportation energy price ally, reduce VMT growth to 1% annually). A policyincreases. combining 35 mpg fuel efficiency and 50% cut in VMT results in highway transportation emissionsAlaska’s transportation policy can affect energy use below current levels by 2030. To reduce VMT, theby promoting either energy substitutes or energy goal nationally is to double transit ridership from 10compliments. Energy substitutes would decrease billion to 20 billion by 2030. The highway fund-the demand for transportation energy. For example, ing reauthorization is expected to increase transitstate transportation policy can be used to reduce the funding 70% from $10.3 billion to $17.3 billionamount of fuel used for transportation by promoting by 2015. In addition to increasing transit use, fed-public transportation systems. An example would eral policy will be directed at increasing walkingbe a commuter rail line or increased bus service and biking trips, increasing telecommuting/on-linebetween the Valley and Anchorage that would allow shopping, and adopting supportive land use policiescommuters to switch from personal automobiles to that accommodate one-third of new developmentfar less fuel intense public transport. through infill of central cities and older suburbs. Mr. Horsley concludes that one third of transportation’sRoads, railroads and airports are all energy compli- contribution to emission reductions will be shapedments but it is likely that energy prices and use drive by reauthorization investments and policies and twodemand for energy infrastructure, not vice versa. thirds will come from federal, state, and local energyIt is important understand the role energy plays in policies, local land use policies, the effect of highertransportation and to pursue transportation policy fuel prices, and new technologies.that is responsive to changes in energy markets.According to John Horsley, Executive Director, The Low Income HomeAmerican Association of State Highway and Trans- Energy Assistance Programportation Officials (AASHTO), transportation pro-duces 33% of CO2 emissions with highways produc- The Low Income Home Energy Assistance Programing 72% of transportation’s share. Transportation (LIHEAP) is designed to help low income house-will need to do its part to address climate change. holds offset the high cost of home heating. TheSome of this fuel use reduction will occur through State’s LIHEAP block grant is administered by thefleet fuel efficiency improvements. Federal legisla- Department of Health and Social Services (DHSS)tion passed in 2007 called for increased Corporate and the Division of Public Assistance.Average Fuel Economy (CAFE) mandate of 35 miles 51
  • 52. Policies with Energy ImplicationsPrior to the spring of 2008, Alaska operated the tors to do the work, as well as a shortage of trainedfederally funded LIHEAP program, which capped energy raters.income at 150% of the poverty income guidelines.In May of 2008, the State Legislature created theAlaska Heating Assistance Program (AKHAP) for AHFC Home Energyhouseholds with income between 150% and 225% of Rebate Programthe poverty income guidelines. The AHFC home energy rebate program assistsIn 2008 Alaska provided 13,620 households with homeowners in making the best energy-efficiencyLIHEAP financial assistance. The average heating improvements for their home. The Home Energyassistance benefit was $756 in 2005. Alaska will Rebate program has no income requirements and fo-receive $23.6 million in Federal LIHEAP funding in cuses on owner-occupied homes. Homeowners payFY2009, up from $16.9 the previous year (Campaign for certain energy-efficiency improvements and arefor Home Energy Assistance, rebated a portion of the cost for doing so.liheap%20fact%20sheet/AK/liheap-AK.pdf). To participate, a homeowner pays an energy rater to make an initial assessment of the home. The hom-AHFC Weatherization eowner completes work on measures chosen fromProgram the Improvement Options Report and then requests a follow-up energy assessment. AHFC will issue aFor years the Alaska Housing and Finance Corpora- rebate for some of the costs of improvement. Thetion (AHFC) has provided free weatherization as- amount of the rebate is determined by the pointssistance to low income households. Households that and step increase in the home’s energy rating, not tomeet the income requirements are assessed to deter- exceed actual expenditures supported by receipts.mine the weatherization measures to be performed These rebates are for up to $10,000. The programon the home. The weatherization improvements are may also supply a $7,500 rebate on qualified, new 5done by one of 15 state designated housing authori- Star Plus homes.ties. Particulate Matter RegulationIn 2008 the State Legislature approved $200 millionfor the weatherization program, and the program’s According to the Environmental Protection Agencyincome requirements were expanded from 60% of (EPA), Particulate Matter (PM) is a “mixture of ex-median income to 100% of median income. Prior- tremely small particles and liquid droplets” that canity is given to the elderly, the disabled, young chil- cause health problems when inhaled. Fine Particu-dren, and families under 60% of median income. A late Matter (PM2.5) is less than 2.5 micrometers inhousehold may not participate in both the AHFC diameter. PM2.5 is a product of combustion, primar-weatherization program and energy rebate program ily caused by burning fuels. Examples of PM2.5(described in the next section). The tremendous sources include power plants, vehicles,popularity of this program has led to bottlenecks and wood-burning stoves, and wildland fires. The EPAwaiting lists because of a scarcity of trained contrac- recently increased the stringency of the PM2.5 stan- 52
  • 53. Policies with Energy Implicationsdard by lowering the previous 24-hour standard of sign and construction of an eligible project. Grants65 µg/m3 to 35 µg/m3. will be awarded based the following criteria:The U.S. Environmental Protection Agency recent- 1. Cost of energy per resident in the affectedly announced that it intends to classify Fairbanks project area relative to other areasand Juneau as nonattainment areas. This clas- 2. The type and amount of matching funds andsification will force local officials to respond by other resources an applicant will commit torestricting the use of wood-burning stoves. Winter the projectinversions often leave the air stagnant, allowing 3. A statewide balance of grant funds to assurePM2.5 to accumulate in the air. If the level of funding is made available for feasible projectsPM2.5 reaches a certain point, the community will in all regions of the Statetemporarily restrict the use of all woodstoves ex- 4. Project feasibility (technical and economic)cept those that burn wood pellets. The new PM2.5 5. Project readinessregulations could significantly increase the cost 6. Success in previous phases of projectof heating in these communities because residents developmentwill not be able to rely on low-cost wood stoves. 7. Economic benefit to the Alaska public 8. Other Alaska public benefit (such as ability toRenewable Energy Fund use technology in other parts of Alaska) 9. SustainabilityIn 2008 the Alaska Legislature established a Re- 10. Local Supportnewable Energy Grant Fund through the passageof HB 152. The legislation authorized the Alaska Energy Research FundEnergy Authority to distribute renewable energygrants and set out procedures to be followed to At this time, no state funding is available for energyaward those grants. The bill also established a research in Alaska. The Alaska Energy Authoritystate heating assistance program in addition to the currently has no mandate or capability to engagefederal heating assistance program, and it estab- in energy research. The Renewable Energy Fundlished an Alaska Renewable Energy Task Force of legislation does not allow for funding of any emerg-legislators. ing technologies, and funding is explicitly limited to projects utilizing proven, existing technologies. ThisHB 152 promised AEA $50 million annually limits Alaska’s ability to utilize emerging technolo-for the next five years to fund renewable energy gies and become a leader in energy development. Itprojects. An additional $50 million was authorized is particularly crippling in a state with very differentduring a legislative special session for FY09. conditions than are found elsewhere in the U.S. in terms of environment, population density, and theRenewable Energy Fund grants are available to isolated nature of the transmission system.electric utilities, independent power producers,governments and government agencies (eg, tribal Applied research is designed to solve existing prob-councils). AEA may recommend grants for fea- lems, to develop recommendations that can be usedsibility studies, reconnaissance studies, energy to improve practices, and to help decision and policyresource monitoring, and/or work related to the de- 53
  • 54. Policies with Energy Implicationsmakers toward effective choices by defining a Engaging community knowledge to measure progress:clear path forward. Rural development performance measures progress report. Prepared for the Denali Commission. http://www.firstalas-According to the National Science Foundation, currently ranks 46th among states in terms Alyeska Pipeline Service Company. http://www.alyeska-of funding spent on R&D, and it has no significant for funding energy research at thestate, regional, or local level. The creation of an Black and Veatch, Alaska Railbelt Electric Grid AuthorityAlaskan R&D or emerging technology fund would (REGA) Study, prepared for the Alaska Energy Authority,put the state in a better position to receive the September 12, 2008.increase in federal R&D dollars for clean energy Colt, S. and Martin, S.(May 2008) Fuel Costs, Migration,development that President-elect Obama is now and Community Viability. University of Alaska Institute ofproposing. Social and Economic Research.References Committee on Climate Change and U.S. Transportation, Transportation Research Board, 2008. Potential Impacts of Climate Change on U.S. Transportation, TRB Special Report 290.Alaska Department of Environmental Conservation,Summary Report of Improvements to the Alaska Institute of Social and Economic Research, University ofGreenhouse Gas Emission Inventory, January 2008. Alaska Anchorage, Alaska Electric Power Statistics (with Alaska Energy Balance)1960-2001, prepared for AlaskaAlaska Department on Natural Resources, Oil and Gas Energy Authority, Regulatory Commission of Alaska andDivisions. 2007 Annual Report. DNR 2007 Annual Denali Commission, November, 2003.Report. erfinal.pdfAlaska Department of Revenue, Tax Division, Rev- Energy Information Administration, Crude Oil Price Fore-enue Sources Book, 2007. cast, Annual Energy Outlook 2008. http://www.eia.doe. gov/oiaf/aeo/index.htmlAlaska Energy Authority, 2008. Request for Grant Ap-plications (RFA) AEA-09-044 for Renewable Energy Energy Information Administration,, Current Crude OilGrant Program. Price Trends, Short Term Energy Outlook, October 2008.RE_Fund.html Energy Authority, Power Cost Equalization Energy Information Administration, Carbon Content ofProgram Guide, August 2007. http://www.akenergyau- Fossil Fuels, 2008. ficients.htmlAlaska Energy Authority, Statistical Report of the Goldsmith, Scott, Short (and Informal) Review Of AlaskaPower Cost Equalization Program, Fiscal Year 2007, Rural Energy Policy, with Particular Reference to Alterna-February 2008. tive Technologies, prepared for the Denali Commission,Ffiles/PCEProgramGuide2007.pdf May 24, 1999Alaska Native Policy Center. (September, 2007) Scott Goldsmith, 1979. Man-In-The-Arctic Program Docu- mentation. 54
  • 55. Hamilton, James D., Understanding Crude Oil Prices, U.S. Energy Information Administration, State Energyprepared for National Bureau of Economic Research, Data Systems. Working Paper No. 14492, November 2008. http:// html?q_state_a=ak& U.S. Energy Information Administration, Natural Gas Im-Information Insights, 2008. The Alaska Energy Efficiency ports and Exports by State. and Policy Recommendations. http://www.aken- ng/ U.S. Energy Information Administration, Coal Report. Panel on Climate Change (IPCC), html#fes1.Aviation and the Global Atmosphere. J. E. Penner, D. H.Lister, D. J. Griggs, D. J. Dokken, and M. McFarland U.S. Energy Information Administration, Natural Gas Im-(eds.), Cambridge University Press. Cambridge, UK, ports and Exports by State.; ng/ng_move_state_a_EPG0_EEX_Mmcf_a.htmInternational Panel on Climate Change, 2007. Climate U.S. Environmental Protection Agency, Office of Trans-Change 2007: The Physical Science Basis. Contribution portation and Air Quality, Greenhouse Gas Emissionsof Working Group I to the 4th Assessment Rprt of the In- from the U.S. Transportation Sector, 1990-2003, Marchtergovernmental Panel on Climate Change [Solomon, S., 2006.D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, Wilson, Meghan, Ben Saylor, Nick Szymoniak, SteveM. Tignor and H.L. Miller (eds.)].Cambridge, UK. Colt, and Ginny Fay, 2008, Components of DeliveredMeera Kohler, AVEC President and CEO PCE overview Fuel Prices in Alaska, University of Alaska Anchorage,power point July 3, 2008 Institute of Social and Economic Research, prepared for the Alaska Energy Authority. http://www.iser.uaa.alaska.Next Generation Air Transportation System, Federal Avi- edu/Publications/Finalfuelpricedelivered.pdf)ation Administration report to the U.S. Congress, 2004. Wilson, Meghan, Ben Saylor, Nick Szymoniak, SteveNorthern Economics, 2007, Cost Assessment for Diesel Colt, and Ginny Fay, 2008, Dollars of Difference: WhatFuel Transition in Western and Northern Alaska Com- Affects Fuel Prices Around Alaska?, University of Alaskamunities, prepared for the Alaska Department of Envi- Anchorage, Institute of Social and Economic Research,ronmental Conservation. May 2008.anpms/as/ulsd/ulsdecon2.htm National Laboratory, Transportation Energy tricpowerfinal.pdfData Book, Table 2.2. Citing, U.S. Department of Energy,Energy Information Administration, Monthly Energy Army Corp of Engineers Waterborne Statistics, Program%20Guide%202007.pdf2006. Program%20Guide%202007.pdfU.S. Department of Energy, Energy Efficiency and Re-newable Energy, The Green Power Network: 55
  • 56. PermittingG iven the high cost of fuels and energy acrossmuch of Alaska, many new projects to develop and operations or for management of the camp for the construction crew. Activities during the resourcelocal resources will be starting across the state over and environmental assessment stage may requirethe coming years. Each of these projects will have different authorizations. Sometimes permittingits own set of needs and development plans. This requirements for larger projects can be coordinated,information will help agencies determine what but often each agency must follow its own regulatoryauthorizations are required for a project to progress process. Some authorizations are dependent onfrom conception through construction to operational others, such as the overall umbrella requirementphase. The specific permits necessary will depend to first obtain a consistency review under theon many variables, and may come from a wide Alaska Coastal Management Program (when theassortment of agencies. Land owners and regulating project is related in the coastal district boundaries).agencies have the authority to determine what is Authorizations for experimental projects are shortneeded. The developer has the responsibility to term in nature and will not carry any preferencework with them all to aquire the proper permits for right, implied or otherwise, toward a long termthe project. authorization.Each project will need site control, which is Specific regulations govern how an applicationachieved by specific authorization from the land and subsequent authorization is treated by theowner. Projects can be on private, native, municipal, nature of the applicant. For instance, with somestate, or federal lands. Often they cross land authorizations, a licensed public utility may haveownership boundaries necessitating permission from different process and fee requirements than anmore than one land owner. Hydrokinetic projects independent power producer. This is important toin rivers or in the ocean also require permission understand as it may have longer term implicationsfrom the agency that owns the submerged land. In in the event that the project developer intends toaddition, navigation or other access issues need transfer ownership or operation in the future. If theto be addressed. In Alaska, subsurface owners proposed transferee does not qualify under the samerights predominate over the surface owner’s rights, terms and conditions of the original authorization, abut impacts on the surface owner must still be totally new authorization process would be required.addressed. There may be different authorizationsfor different phases of the life of the project. These Some authorization processes are driven by strictauthorizations often come in the form of permits, timelines. A majority of the authorizations will takeleases, or rights of way with stipulations that govern some time to obtain. It is essential that the projectuse. developer understand the probable timelines to obtain the necessary authorizations. Entities seekingIn addition to site control, the use and activities that permits are encouraged to start early by workingare part of the project often require the developer with the authorizing agencies to reduce the chance ofto go through other regulatory processes and obtain project delays at critical junctures. Many agenciesfurther authorizations. These other regulatory are under large workloads, and it is rare that therequirements may control the use of the land and agencies can drop the permits they are working onresources or even the sale of power. There may be in order to expedite an individual request. Energyrequirements for the actual physical construction projects funded through grants do not guarantee that 56
  • 57. Permittinga project can get all authorizations. Grants do not set The following is a list of some of the agenciesagency authorization-processing timelines. that should be contacted to determine issues of land ownership or required authorizations. ManyThe project developer may need to gather data or agencies offer a centralized public service center,conduct studies that will be used to determine the the best initial contact point. Note that this does notappropriate stipulations on given authorizations. include a list of all the potential land owners, norSome of the federal processes require environmental does it break down each agency that may requireor environmental impact assessments which can more than one type of authorization.take a significant amount of time. Most state andfederal regulatory processes require a public process Alaska Department of Environmentalwith a chance for the public to provide input into Conservationthe decision-making process. Most public agencies Alaska Department of Fish and Gamealso have some form of option for affected parties Alaska Department of Natural Resourcesto appeal decisions. Agencies try to make sound Regulatory Commission of Alaskadecisions that will withstand challenge and thus not U.S. Army Corps of Engineersdelay projects. It is in the project developer’s best Bureau of Land Managementinterest to cooperate fully in providing required U.S. Coast Guardinformation to the respective agencies. Developers U.S. Environmental Protection Agencyneed to schedule these resource assessments and Federal Aviation Administrationreview periods into their proposed timelines. Federal Energy Regulatory Commission U.S. Forest ServiceBecause of the complexity of the permitting U.S. Fish and Wildlife Servicerequirements, and the diversity of resourcedevelopment projects, it is best to start working Whether project developers are operating in thewith the agencies early in order to understand the Coastal Zone or not, two websites provided by thepotential authorizations that are needed and the Division of Coastal and Ocean Management underappropriate timing for applications to be submitted. the Department of Natural Resources provide helpfulProfessional permitting and project consultants will information and diagnostic tools for determining whencontract for this type of work and help a developer various agencies should be contacted.acquire the necessary approvals. Most agencies havea specific contact who can explain what is needed or Additional Resourcesprovide contacts with the appropriate entities. Coastal Project Questionnaire: coastal/acmp/Projects/pcpq3a.html Agency contacts in regions of the state: http://dnr. 57
  • 58. Diesel Efficiency and Heat Recovery Energy StorageAEA Program Manager: Lenny Landis (771-3068) New Powerhouse New generators in in Tuluksak. Tuluksak. TECHNOLOGY SNAPSHOT: DIESEL EFFICIENCY Most rural Alaskan communities generate the majorResource Distribution portion of their power with fuel oil Nearly 180, consuming more than 2,500 MWh ofNumber of communities impacted electrical energy annuallyTechnology Readiness CommercialEnvironmental Impact Reduction of fuel use and related emissions Typical payback of 3 to 5 years depending onEconomic Status technology used and specific application per community58
  • 59. IntroductionR ural Alaska relies heavily on diesel enginetechnology as the main energy source for producing Over the last six years, deployment of modern diesel technology in rural community dieselelectricity. This reliance is not likely to change powerhouses has been documented to increase thesignificantly in the immediate future. Hybrid usable electrical energy generated from a gallon ofand standby diesel generation is still required diesel fuel by 20% - 30%. Installation of monitoredto augment almost all rural renewable electrical heat recovery systems from both traditional waterenergy sources. In addition, the development of jacket systems and new exhaust stack heat recoveryrenewable and alternative energy sources for the systems can increase the fuel conversion efficiencyproduction of electricity is typically a multi-year of diesel powerhouses by another 20% - 35%.project, while diesel The deploymentefficiency can usually of automatic,be implemented in a load sensingmuch shorter time. switchgear withFor this reason, diesel data acquisition andefficiency is one of remote monitoringthe most cost-effective capabilities hasstrategies with the lowered theshortest payback. maintenance andDiesel efficiency can operational costsalmost immediately in powerhousesreduce the energy recently constructedcost burden on by the Alaskarural, grid-isolated, Energy AuthorityAlaskan communities (AEA) in ruralwhile renewable and villages.alternative energyresources are developed. The Alaska Village Electric Cooperative (AVEC), with 53 member villages, has also reported similarRecent advances in diesel engine efficiency, increases in fuel efficiency as documented byautomated generator controls, heat recovery, communities that have taken advantage of AEA’sand continuous operations and maintenance Energy Cost Reduction grant program.techniques have made possible diesel fuel efficiency The following charts illustrate general estimates ofimprovements of more than 50% in old, sometimes the typical distribution of the fuel energy used inobsolete, rural powerhouses. diesel electric power generation. 59
  • 60. Technology Overview of Generator Fuel Efficiency and Heat Recovery Old Technology 80% Wasted 20% Utilized New Technology 63% Utilized 37% Wasted 60
  • 61. Technology Overview of Generator Fuel Efficiency and Heat RecoveryIncreases in diesel generation efficiency can generally be found in three broad areas. 1. Increasing the amount of electricity (kW) produced per gallon of diesel consumed by the generator engine 2. Recovering heat from the engine water jacket cooling system and, if applicable, from the engine exhaust stack 3. Minimizing losses in the electrical distribution systemA more detailed breakdown with categories, related technologies, and potential gains is shown in thefollowing graphic. 61
  • 62. Latest Diesel Engine and Powerhouse Control TechnologiesDiesel Engine ControlsTighter control over the fuel systems provided by electronic fuel injection, electronic speed governors, andelectronic engine controllers has boosted the usable kWh per gallon of diesel. Efficiency improvements of10% - 15% over the older mechanically governed engines have been achieved in over 25 rural powerhousesupgraded by AEA.Screen images of dieselengine controls. 62
  • 63. Heat Recovery Technologies A significant portion of fuel oil used in ruralPowerhouse Switchgear Controls Alaska is for space heating. Recovery of wasted heat from diesel generation has great economicAdvances in powerhouse switchgear control for the potential for remote Alaskan communities. Typicalautomatic dispatch of the most efficient generator or applications for heat recovery are environmentalcombination of generators to closely match changes space heat for community buildings and augmentedin the village load demand throughout the day have electric power generation. The most efficient use ofallowed efficiency increases of an additional waste heat is to use it directly as heat. This avoids10% - 20%. efficiency losses that occur when heat is transformed to another kind of energy. The recovered heat canThese next two graphics are computer screen captures be used for space heating, domestic hot water, orof the Supervisory Control And Data Acquisition for tempering municipal water supplies to prevent(SCADA) interface utilized in modern powerhouses. freezing and facilitate treatment. The efficiencyNotice that this one is a diesel-hydro hybrid. of recovering waste heat for augmenting electricalProgrammable switchgear controls facilitate more power production is lower than that for heating;efficient coordination with renewable and alternative however, it can be attractive and economical in someenergy sources of electrical power like diesel/hydro places since electrical power is needed year roundand diesel/wind hybrid power systems. as opposed to space heating, which is usually only needed during the cold seasons.Additional benefits of new switchgear • Automatic recovery from power outages Heat recovery may use one or all of the diesel • Automatic dispatch of available alternative generator’s waste heat sources including the exhaust energy sources stack, jacket water, and charge air. Waste heat • Data acquisition, historical data downloads recovery using jacket water heat and/or charge air for utility planning, energy engineering and heat directly for heating is a mature and proven research technology. Over a quarter of rural village diesel • Remote monitoring for faster, more efficient generators have already been equipped with jacket troubleshooting water heat recovery systems. Charge air heat hasRecently, the reliability and automation of a been recovered for heating in a select number ofnew diesel/hydro hybrid system was put to a communities.real-world test when an anomaly occurred in acommunity’s electrical distribution system. The Water Jacket Heat Recoveryhydro was supplying the full community load whena momentary distribution fault tripped the hydro For rural Alaska, the technologies most applicableoff line in the early morning. Within seconds the are systems that use recovered heat directly, aspowerhouse controls started the diesel generators the end product. Modern high-efficiency heatand restored power to the town. Within minutes exchangers, super-insulated heat piping, high-the controls restarted the hydro, paralleled it with efficiency electric pumps, modern electronic BTUthe most efficient diesel generator, then cooled meters, and variable speed radiator fan motorand shutdown the diesel generator. Without the controllers maximize the utilization of heat availableintervention of an operator and in a short period from the diesel engines. Waste heat recovery forof time, the community was fully back on clean, space heating is a common, proven design. Theefficient hydro. associated design and maintenance procedures are well understood in the Alaskan power industry. For this reason, water jacket heat recovery for space heating is considered a mature technology in Alaska. 63
  • 64. Heat Recovery TechnologiesExhaust Stack Heat Recovery systems on large diesel engines in industrial level applications show exhaust heat for heating to be aHeat recovery from the diesel engine exhaust stack mature and proven technology, ready for a proven and cost-effective technology in larger Performance and economic results will differ forpower plants. Recent technological improvements each project. Influential factors, including powerhave made exhaust stack heat recovery feasible plant load pattern, heating load characteristics,and economical in midsize engines, which are and existing heating system infrastructures willmost representative of the engines in rural Alaska. also vary accordingly. For this reason, it mayThese advances in exhaust stack heat recovery have be necessary to analyze the specific generatingboosted recovered heat and reduced the hazards and system to be retrofitted, before the installation of anmaintenance burdens typical of the older systems. exhaust heat recovery system. As a rule of thumbAt this time, only one production diesel generator in for rural Alaska, before exhaust stack heat recoveryAlaska, apart from the University of Alaska diesel is considered, it is recommended that the dieseltest bed, is known to employ an exhaust stack heat generator capacitity exceed 400 kW and that therecovery system for heating applications. This is community have a year-round population above 700a relatively large 5 MW power plant at a mining No heat recovery performance data for thatinstallation was readily available for this publication. Heat to Electricity TechnologyThe reasons why diesel stack exhaust heat recovery There are promising methods for waste heat tois not considered more often in rural Alaska include electric power conversion: organic Rankine cyclethe high capital and maintenance costs, as well as the (ORC), Kalina cycle, exhaust gas turbine, and directpotential for excessive exhaust system corrosion and thermoelectric conversion systems. The organicsoot build up. The risk of the heat recovery system Rankine cycle and Kalina cycle systems may becausing generator failure and higher maintenance preferred because of their availability, ease ofcosts often outweighs the value of recovered energy. installation, and efficiency. For years, engine heatAdvances in exhaust heat exchanger design and recovery for power generation has been applied tooperational strategies have reduced the probability of very large power plants and marine engines. Manycorrosion and soot problems. The coming mandate heat recovery power systems have capacities over afor the use of low sulfur fuel oils will also reduce megawatt, including combustion engines powered bycorrosion risk. natural gas, coal, and petroleum-based fuels.Recently, the University of Alaska Center for Energy The performance of the waste power system isand Power conducted an experimental study to relatively sensitive to exhaust temperature and theinvestigate the economic effect and feasibility of energy content of the heat sources. For midsizedemploying exhaust heat recovery techniques on a engines, technologies for converting waste heatmidsized diesel engine. Based on the study results, to electrical power are still in the research andthe diesel exhaust heat recovery strategy appeared to development stage and not yet considered maturecause no critical problems to engine performance nor technologies. Their feasibility is highly dependentto increased maintenance frequency. on the fuel cost. Current research and development groups include engine manufacturers and powerThe payback time for this exhaust heat recovery plant companies. The University of Alaskasystem is estimated to be less than three years for Center for Energy and Power is also assessing thea fuel price of about $3 per gallon, with engine performance of heat-to-electricity technologies fromoperation of eight hours per day. Study results several manufacturers.and performance of existing exhaust heat recovery Most existing ORC systems are used in geothermal 64
  • 65. Other Diesel Efficiency Technologiesapplications and range in size from about 250 kWto multi-MW. ORC systems for engine waste heat The voltage of the distribution system can have aapplications have similar capacity. Commercially significant effect on line losses. An older systemtested Kalina cycle systems are not common, with design utilizing 208, 480, and 4160 voltagesonly a few in production and almost all of the units becomes inefficient when the system is expandedin multi-MW capacity. Successful Kalina cycle to accommodate a growing community’s newsystems are much larger than a megawatt and would subdivisions and projects. Newer transformers morenot necessarily scale down to be effective systems efficiently convert between voltages. Power factor canon the midsized diesel engines employed in rural be a significant issue in rural communities where longAlaska. For many years, small scale, organic underground runs have small loads.Rankine cycle systems were used successfullyin some Trans Alaska Pipeline systems. The Fuel Boostersmanufacturer presently produces only large scalesystems. Kalina cycle systems based on ammonia Fuel boosters have not yet been proven underare rare, and commercially available options are not the harsh, varying conditions in remote Alaskanof a scale suitable for Alaskan village generators. powerhouses. The Alaska Energy Authority suggests test bed studies through the University of AlaskaThe performance of the thermal-to-power conversion Center for Energy and Power and pilot testing in ruralsystems is sensitive to the properties of heat source, powerhouses.heat sink, working fluid, and energy intensity. Forexample, resources with similar power capacities may Operations and Maintenancerequire different systems in order to obtain optimumsystem performance. Therefore, each prospective The ability a community has and the methods itinstallation site will require an individual analysis to uses to maintain and operate its powerhouse haveinsure appropriate operation. a significant impact on efficiency. Keeping diesel generation systems operational and maintained hasDistribution System Efficiency a direct influence on the energy produced for eachUpgrades gallon of diesel fuel consumed. Operator training, spare parts availability, automatic system monitoring, data trending, and data analysis, along with promptHow the electrical energy is delivered to the load maintenance and repair are key factors in keepingor customer can have a significant impact on the efficiency and performance high.efficiency of the system. The use of newer, moreefficient transformers and more flexible power The previous charts document variations in dieseldistribution systems that allow easier balancing of the efficiency due to operation and maintenance practices.village loads can increase the efficiency of deliveredpower 3% - 6%. Village 1 received a new powerhouse upgrade in 2000. Efficiency immediately improved fromElectrical loads on the distribution system must be previous years. Notice the decline in the yearsreasonably balanced to obtain the greatest efficiency directly after 2000. This is due to the fact thatfrom the generation system. Loads shift seasonally the utility was unable to consistently operate andand annually as new loads and buildings are added maintain the powerhouse. In 2005, maintenanceor removed. The generation system must be assistance was provided via the Circuit Ridermonitored and the distribution system loads adjusted program. Efficiency improved and then againappropriately. Distribution systems may need declined when the proper operations andupgrading if appropriate load shifting adjustments maintenance were not continued.cannot be made. 65
  • 66. Inconsistent Maintenance (sporadic repairs, generators out of service for long periods). Low Level Maintenance (timely repairs, general engine decline, system de- tuned).66
  • 67. These charts presents the information from a differentperspective. Notice the projected loss in savings andefficiency if powerhouse upgrades are not continued androutine maintenance via Circuit Rider is not performed. 67
  • 68. This chart presents powerhouse efficiency as a Waste Heatpercentage of improvement. The new Rural Power Since technologies for recovering heat from jacketSystem Upgrade project improved efficiency by water and exhaust gases are mature and commercial>26%. Over time, the powerhouse lost nearly 10% heat recovery devices are in production, all utilitiesof the improved efficiency from lack of proper should consider the feasibility of employingroutine maintenance. jacket water and exhaust heat recovery for heatingImprovement to the operation of existing diesel is a short-term opportunity for almost everyrural community. As such it should be an area of Heat to Electricityimmediate focus. If Rural Power System Upgradesand Circuit Rider maintenance were fully funded More research is needed to evaluate the suitabilityacross a five year period, a significant amount of fuel of organic Rankine cycle and Kalina cycle systemsoil could be saved. If a portion of the funds from the for use in most small Alaska utilities. TheseCircuit Rider maintenance program savings were technologies may be suitable for use in Alaska’sset aside, local communities or regional associations larger power generating plants that operate on fuelcould continue the Circuit Rider from the reserves, oil, but they should first be demonstrated via a pilotand the efficiency gains could be sustained. project or the diesel testbed at the University ofIf proper routine maintenance is performed on the 31 Alaska.powerhouses that have already been upgraded, and ifthe 62 remaining powerhouses in communities AEAassists are upgraded and properly maintained, over Implementation800,000 gallons of fuel per year will be saved. The following table provides rough preliminaryAnother fuel-saving measure that could be effected construction estimates for various types of dieselimmediately is to get existing heat recovery systems efficiency upgrade projects in rural Alaska.operating properly. While a number of Alaskancommunities have some type of waste heat recovery AEA’s Rural Power System Upgrade (RPSU)system, a substantial number of those systems program is well suited to rapid implementationare not functional. Available records show that of diesel efficiency technologies in rural Alaskanif all existing waste heat recovery systems were communities. The RPSU program also offersoperational, an estimated 2,917,099 gallons of fuel technical and emergency assistance to over 130could be saved annually. Assuming a $3.00 per isolated, rural villages, and has a longstandinggallon fuel cost, that translates to over $8,751,298. relationship with the Alaskan rural utilities and localThese numbers are impressive, reinforcing the value native organizations. The program has upgradedof supporting heat recovery systems. It would take 32 rural village power systems over the last eightonly a fraction of this annual savings to get all of years, primarily using Denali Commission funding.these systems back up and running effectively. This program replaces obsolete, inefficient diesel powerhouses with regulatory-compliant facilitiesGenerator Efficiency that employ new diesel and control technology.Since technologies for increasing the kWh per These improvements have increased diesel fuelgallon of diesel burned are mature and commercial efficiency by 20% - 50%, saving hundreds ofgenerator engine and powerhouse controls are in thousands of gallons of fuel to date.production, all utilities should consider the feasibilityof using them to reduce the cost of electrical power With proper funding, RPSU has the resources inin rural Alaska. Routine maintenance and operations manpower, engineering support, and constructioncan have a significant impact on efficiency. management capacity to build five new powerhouses and to upgrade an additional five powerhouses every year. 68
  • 69. Diesel Efficiency Project Rough Construction Notes Type EstimateSemiannual Circuit Rider $5,000 - $15,000 Semi annual on site training and technical assistanceRepair an Existing Heat Analyze, repair, upgrade and install BTU meter and monitoring $25,000 - $50,000Recovery System controlsInstallation of a SCADA Remote monitoring capable SCADA system in a satisfactorily $10,000 - $50,000System functioning powerhouse For suitable powerhouse, modify existing cooling, install heatInstall a Water Jacket $180,000 - $250,000 exchanger, BTU monitoring, and arctic pipe to nearby heatHeat Recovery System receptor.Exhaust Stack Heat For suitable powerhouses with greater than 400kWh average $500,000 - $750,000Recovery demand and a nearby heat receptor. Powerhouse structure requires substantial remodel andPowerhouse Upgrade $800,000 - $1.2million installation of heat recovery system Retire existing powerhouse and replace with a prefabricatedPowerhouse Module $1.2milllion - $1.5million module New powerhouse and heat recovery system with someComplete Powerhouse $2million-$3.5million distribution improvementsRecommendations The next steps include: • Identify and correlate funding sources for stable multi-year budget for the program • Ramp up the current RPSU Program for five plus new powerhouses and five plus upgrades per year • Evaluate new technologies and support field testing of promising techniques that will increase fuel efficiency • Add fuel efficiency parameter to evaluation process for new powerhouses • Reevaluate powerhouses replaced over the last eight years for new technology efficiency upgrades 69
  • 70. Case StudyT he City of Ouzinkie was able to save substantialamounts of diesel fuel and stabilize its rising energy to provide backup power just in case the hydro went offline. The trade-off for a small increase in reli-costs with the combined efforts of community, state ability was a significant increase in diesel fuel costs.and federal agencies. The City of Ouzinkie, Denali The diesel generators’ sizes were mismatched forCommission, DCCED Community Development community load and for operation with the hydro.Block Grant Program, and Alaska Energy Authority’sRural Power System Upgrade Program all workedcooperatively on Ouzinkie’s successful and notewor-thy diesel hybrid project.Before the ProjectThe City of Ouzinkie has historically been plaguedwith unreliable power, unpredictable outages, andnumerous consumer complaints. Customers routine-ly replaced damaged electronic equipment and appli-ances due to power quality problems. The outdatedpowerhouse equipment was far past its designeduseful life. The plant consisted of two inefficientdiesel power generators, obsolete manual controls,and an unreliable hydroelectric system. The systemrequired constant operator intervention to maintaina marginal level of operation. The existing power-house structure was in relatively good condition andconsisted of steel construction with concrete floors.The dam, penstock, and turbine building were inaverage condition.The City’s water reservoir, dam, and penstock servea dual purpose. They supply the community withpotable water and provide the energy needed to turnthe hydroelectric turbine. When the water levelbehind the reservoir becomes low due to freezingtemperatures or low precipitation, the operator mustshut off the hydroelectric and revert fully redundantto expensive diesel generation.The obsolete methodology used for the hydro loadand frequency stabilization wasted nearly a third ofthe potential energy of the hydro. A diesel enginewas routinely operated with the hydroelectric turbine Above: Old Ouzinkie powerhouse. Below: City of Ouzinkie reservoir. 70
  • 71. Successful Rural Power System Upgrade for the City of OuzinkieProject Scope The community’s utility manager, Tom Quick, recently reported that last year the community ex-The project goal was to stabilize the cost of electrical pended over $18,900 in diesel fuel at a cost of $2.76energy in the community while improving the reli- per gallon. This year they have only spent $4,900 atability and safety of the systems. This was accom- a current cost of $3.56 a gallon. Port Lions, a nearbyplished by completely rebuilding the diesel power- community, is reportedly paying over $8.00 a gallonhouse and renewing the hydroelectric system. The for diesel. Mr. Quick believes that keeping commu-diesel powerhouse structure was sound, but a small nity energy cost stable has prevented egress of theaddition of a control room was added for the safety local population.of the operators and the reliability and life of the Recently, the reliability and automation of the newnew electronic switch gear and control equipment.The cooling radiators were replaced and relocatedoutside. The diesel fuel and cooling piping wereconsolidated. The old, single-wall, bulk diesel fueltank was replaced with a double-wall intermediatetank outside the plant. A new day tank with auto fillcontrols was installed. An automated communica-tions link between the diesel generator switch gearand the hydro facility was established. The turbineand generator were refurbished.The two old 60kW and 200kW generators werereplaced with new 40kW, 100kW, and 155kW dieselgenerators. All three have automatic paralleling andload sharing capabilities in any combination witheach other and with the hydroelectric turbine. Themodern switchgear automatically dispatches themost efficient generator.The new powerhouse switchgear and controls canbring the system from blackout to full diesel to die-sel/hydro combination to full hydro. The system willselect the most fuel efficient combination of dieseland hydro power all the way to full hydro (diesel off)operation.Project ResultThough not fully complete, the project has alreadysubstantially lowered the community’s diesel fuelconsumption, increased power reliability and quality, Above: The City’s new powerhouse building.and increased the efficiency of the water resource. Below: The new powerhouse equipment. 71
  • 72. Case Studydiesel/hydro hybrid system was put to a real worldtest when an anomaly occurred in the rural commu- King Cove, Pelican, Gustavus, and Larsen Bay havenity’s electrical distribution system. The hydro was similar hydro and diesel electric systems. AEA issupplying the full community load when a momen- currently working closely with these communitiestary distribution fault tripped the hydro off-line in to maximize their use of renewable hydro resourcesthe early morning. Within seconds the powerhouse and minimize their use of diesel fuel.controls started the diesel generators and restoredpower to the town. Within minutes the controls re-started the hydro, paralleled it with the most efficientdiesel generator, and then cooled and shutdown thediesel generator. Without the intervention of anoperator in a short period of time the community wasback on clean, efficient hydro.Remaining ItemsFew items still remain to be completed:To provide long-term efficiency, reliability, andsafety, replacement of the controls and switch gearat the hydro turbine building, addition of a reservoirlevel sensor and surveillance camera, and installationof a reliable communication link to the dam reser-voir. Future plans include waste heat recovery fromthe diesel powerhouse and electrical distributionimprovements.Continuing EffortsWith the partnership of the Denali Commission andother agencies, Alaska Energy Authority’s RuralPower System Upgrade Program continues to assistrural communities to achieve results similar to thoseof Ouzinkie. 72
  • 73. Diesel Efficiency WorkgroupIn June 2008 a Diesel Efficiency Workgroup formed to focus on reducing diesel fuel consumption in rural com-munities through generation and distribution efficiency measures. The group also reviewed the suitability ofavailable technology for use in rural Alaska, and verified the capital costs and debt service assumptions, alongwith long term operation and maintenance costs. The structure and output of the task group is represented in thefollowing graphic. 73
  • 74. Efficiency (End-Use)AEA Program Manager: Rebecca Garrett (771-3042) TECHNOLOGY SNAPSHOT: ENERGY EFFICIENCY The cheapest unit of energy is the one unused. Resource Distribution Increase efficiency and conserve in order to lower the cost of energy. Resource potential exists throughout the state. Number of communities impacted Energy conservation and efficiency are ongoing projects that are changing and developing constantly. Mature – energy efficiency requires more mind-set than technology. The most important infrastructure Technology Readiness will be an educated public. Education and marketing are valuable components of end-use energy management. End-use efficiency also requires proper design to consider user needs and comfort. Proper disposal of Environmental Impact old equipment is necessary. The result is a reduction of energy used, the amount of fuel used, and related emissions. The rate of return for conservation and efficiency is extremely high. This is a necessary step to take Economic Status before any kind of new infrastructure is considered. That said, payback depends on energy efficient measures. This section describes end-use conservation, existing programs to promote end-use conservation measures, and other sources of information on end-use conservation for rural Alaska. 74
  • 75. IntroductionT he goal of energy conservation and efficiencyis to decrease the amount of energy used, without Alaskans do for energy end-use control. This reduction in demand will lead to a lowering in energy supply development cost.sacrificing comfort. Examples of energy efficiencypolicy or best practices are building codes, appliance Energy efficiency should be viewed as anand equipment standards, and efficiency mandates. investment, in which an initial cost is weighedEnergy efficiency also means operating and against a subsequent reduction in expected energymaintaining facilities or homes in the most efficient use. Costs may continue to rise, but high costs canmanner, by adding insulation, maintaining boiler be mitigated by energy efficiency. Increased end-usesystems, or testing the air flow. energy efficiency will bring net economic benefits to Alaskan homes and businesses.Alaska has traditionally focused on energy supply asopposed to efficiency. Many Alaskan communities Energy conservation focuses on where the energyrely on diesel generation. When diesel prices are goes. The red area in the figure below highlightslow, conservation tends to literally slip out the sectors on the demand side of the Alaskan energywindow. flow.Energy efficiency and renewable energy are twinpillars of a sustainable energy policy. Becomingmore energy efficient is seen as one solution tocommon, critical problems such as energy security,global warming, and fossil fuel depletion. Goodenergy conservation policy is primary whenaddressing these critical issues. The reduction ofdemands of infrastructure should be the first thing 75
  • 76. Existing Conditions Major Organizations and Programs The list below provides an overview of entities that promote energy efficiency in rural Alaska. - Alaska Housing Finance Corporation (AHFC) - Alaska Energy Authority (AEA) - Cold Climate Housing Research Center (CCHRC) - Alaska Craftsman Home Program - Alaska Building Science Network - Cooperative Extension Service - Weatherization Assistance Program Providers overview: e.g.: Table 1: Climate Zones for Alaska 76
  • 77. Alaska Housing Finance CorporationA laska Housing Finance Corporation efficiencyprograms address residential energy conservation, 3. Weatherization Program The Weatherization Assistance Program (WAP) enables low-income families to permanently reducelow-cost loans for energy-efficient structures, their energy bills by making their homes moretechnical assistance, and weatherization. energy efficient. During the last 30 years, the U.S. Department ofHome Energy Improvement Program Energys (DOE) Weatherization Assistance Program has provided weatherization services to more thanIn May 2008 the Alaska legislature appropriated 5.6 million low-income families.$300 million to AHFC for three programs to help By reducing the energy bills of low-income familiesAlaskans reduce energy bills and make their homes instead of offering aid, weatherization reducesmore energy efficient. The three programs are: dependency and liberates funds for spending on more pressing family issues. On average,1. Home Energy Rebate Program weatherization reduces heating bills by 32% andThe program allows homeowners who make their overall energy bills by $358 per year at currentown energy efficiency improvements to receive prices. This spending in turn spurs low-incomea rebate for some or all of their expenditures. It communities toward job growth and economicrequires a home energy rater to evaluate homes development.before and after the improvements. The rebatescover the cost of ratings up to $500 and cover thecost of improvements up to $10,000. Residential Energy Efficiency2. Second Mortgage Program for Energy AHFC also published minimum insulationConservation requirements for buildings in Alaska based on theThe program allows borrowers to apply to AHFC for International Energy Code (IECC) 2006 Sectionsfinancing to make energy improvements on owner- 402.1 through 402.3. IECC describes the prescriptiveoccupied properties. If the Home Energy Rebate method for compliance and establishes minimumProgram does not fully cover energy efficiency thermal envelope insulation requirements forimprovements, the Second Mortgage for Energy buildings in general. AHFC encourages buildersConservation program enables AHFC to loan up to to exceed these minimums. For this reason, AHFC$30,000 to qualified borrowers. published a list of Alaska-specific amendments to the IECC 2006 and the ANSI/ASHRAE Standard 62.2- 2004, Ventilation and Acceptable Indoor Air Quality in Low-Rise Residential Buildings, (ASHRAE 62.2- 2004). These amendments shall be limited to new construction only. AHFC established 5 new IECC climate zones and assigned a zone to each Alaskan community based on heating degree day ranges (Table 1). 77
  • 78. Alaska Energy Authority (AEA) A laska Energy Authority (AEA) promotes energy conservation in Alaska through several programs. Alaska Rural Energy Plan As an equal participant in the State Energy Program The Alaska Rural Energy Plan published in 2004 (SEP), AEA is able to offer small technical assistance by AEA identified and widespread opportunities grants that help communities get a handle on supply for reducing costs of power and heat. After a and demand side management and seek funding for preliminary screening analysis that identified end- implementation. AEA promoted the Village End use efficiencies as a potential source of economic Use Efficiency Measures Program (VEUEM) and is benefits for rural households, Section 4 of the 2004 seeking to implement the Alaska Energy Efficiency Alaska Rural Energy Plan examined end-use energy Program and Policy Recommendations for the future efficiency in rural Alaska households and rural of their end use programs. schools in communities that are eligible for Power Cost Equalization (PCE) Funding. The objective The final “Alaska Energy Efficiency Program and of the study was “to evaluate the costs and benefits Policy Recommendations” report was completed of end-use energy efficiency systems that are by Information Insights, Inc. for the Cold Climate suitable for rural Alaska and determine the extent Housing Research Center in June 2008. The report to which these systems could potentially reduce was funded by the Alaska Energy Authority and the cost or improve the reliability of electricity the Alaska Housing Finance Corporation. It is for rural communities” and, to review program a comprehensive review and analysis of energy implementation alternatives with the goal of efficiency policies and programs in the State maximizing program effectiveness. of Alaska. With primary emphasis on Railbelt communities, the review focuses on programs Thereby the study distinguished between the that address end-use energy consumption in space engineering economic potential (avoided cost heating and electrical needs of residential and if adopted) and market potential (estimate of commercial users. participants) of end-use energy efficiency measures. The study makes this distinction to account for the The report outlines energy efficiency measures that fact that despite extremely favorable engineering can be rolled into the Alaska State Energy Plan and economics, customers may not purchase the most implemented immediately. These energy efficiency economic alternative. measures, undertaken at low cost, pay back initial investment in a matter of months or a few years and The Alaska Rural Energy Plan also addresses provide long-term cost savings. some utilities concern that “in low or no-growth markets with adequate generation capacity, a large investment in energy efficient light bulbs may have adverse effects by noticeably reducing demand and causing generating plants to operate lower on their fuel efficiency performance curve”. As an example, an annual $224 savings per household in rural Alaska could be achieved by switching to fluorescents light bulbs, assuming seven incandescent bulbs that would be replaced with small compact fluorescents. 78
  • 79. Alaska Energy Authority (AEA)Village End-Use Energy EfficiencyProgram The program helps communities to achieve significant progress toward energy efficiency.Community impact is exactly what Alaska EnergyAuthority (AEA) is considering when coming up In Phase I, the average grant fund per village waswith the Village End-Use Efficiency Measures $37,771 with a total program grant fund of $642,116.(VEUEM) program. Communities are selected Significant in-kind contributions from the localbased on recently having received or being about to school districts helped expand the reach of thisreceive a Rural Power System Upgrade (RPSU) or program. Full Phase I reports can be found here:other energy infrastructure project. The intent is toreduce usage and properly size new power systems. covers both demand and supply side issues. programsalternativeVEUM.htmlThe village end-use energy efficiency program The figure below provides a community overviewperforms energy efficiency upgrades on rural of finished (Phase I, blue) and ongoing (Phase II &Alaskan community buildings. AEA, with funding III, black & red) projects. Additional communitiesfrom the Denali Commission, works with villages will be included in the program if funding becomesto help them achieve energy savings by replacing available.or installing energy-efficient lighting, switch boxes,motion sensors, set back thermostats, weatherstripping, and low mass boilers. 79
  • 80. Case Study: KoyukT he community of Koyuk participated in Phase I ofthe village end-use energy efficiency program. In total, The potential cost savings of energy conservation and efficiency is extremely difficult to get a handle5 community buildings and 7 teacher housing units on. During a time of rising fuel costs, efficiencyreceived energy efficiency upgrades. The city-owned may simply keep costs stable while actually reducingbuildings got retrofitted with 93 linear fluorescent usage. Energy conservation and efficiency shouldfixtures with T8 lamps and electronic ballasts, and always be looked at in usage numbers as opposed toseven compact fluorescent light bulbs were installed. cash payback.The pre-retrofit energy use for all lighting was 14,852watts. The energy use for all lighting post-retrofit In small communities, the economy of scale is atis projected at 10,550 watts. This equals an energy stake. If the school is the largest electric user in thereduction of 29% or 4,302 watts. The estimated annual community and they reduce their usage by 30%, thesavings under different assumptions are shown in the utility must still recover their fixed costs from the lasttable below. fuel delivery and pay for employees. The community may experience a rate increase. However, exploring both supply and demand side efficiency opportunities can reduce any community-wide impact. Hours Per Day / Electrical Savings Avoided Diesel Avoided Diesel 250 Days Per Year Use Costs 4 Hours $1,570 315 Gallons $589 7 Hours $2,748 552 Gallons $1,031 10 Hours $3,926 788 Gallons $1,473 80
  • 81. Alaska Energy Efficiency Program and Policy RecommendationT he “Alaska Energy Efficiency Program andPolicy Recommendations” report was completed The report also points out, that using energy more efficiently does not necessarily mean seeing aby Information Insights, Inc. for the Cold Climate decreased level of service. With advances inHousing Research Center in June 2008. The report technology and simple changes in behavior,was funded by the Alaska Energy Authority and significant savings can be realized withoutthe Alaska Housing Finance Corporation. It is a compromising level of service.comprehensive review and analysis of the energyefficiency policies and programs in the State of The authors evaluated possible policyAlaska. The review focuses on programs that recommendations based on:address end-use energy consumption in spaceheating and electrical needs of residential and • Return On Investment (ROI)commercial users, with primary emphasis on Railbelt • Benefit/Cost Analysis (B/C)communities. • Carbon Reduction • Present Value of Savings (PVS)The need for such a report was recognized because • Ease of Implementationdemand side management (energy efficiencymeasures) and conservation are often overlooked by These recommendations are broken out into ninedecision makers in favor of supply side solutions, categories:which offer constituents new projects and fundingopportunities. The report states that supply side 1. State Leadershipsolutions are necessary in Alaska, but efficiency 2. Funding Energy Efficiency Programsmeasures should be step one in any energy plan. 3. Public Education and OutreachEfficiency measures are the best way to decrease 4. Collect Baseline Datademand and save money. 5. Existing Residential Buildings 6. New Residential ConstructionThe report outlines energy efficiency measures 7. Existing Commercial Buildingswhich can be rolled into the Alaska State Energy 8. New Commercial ConstructionPlan and implemented immediately. These energy 9. Public Buildingsefficiency measures can be undertaken at low cost,paying back initial investment in a matter of months The report also provides a preliminary budgetor a few years, and, they would provide long-term for costs of implementing and maintainingcost savings. recommended energy efficiency programs and policies. 81
  • 82. Other Organizations Conclusions and RecommendationsT he Cold Climate Housing Research Center testsnew building technologies in Alaska. T he future of Alaska demands that every resident get the most energy out of each unit purchased. Energy efficiency has the highest return onThe Alaska Craftsman Home Program, Inc. educates investment of any energy source. The environmentalAlaskans in energy-efficient building technology implications are extremely high as well. Manyspecifically for northern regions and their diverse facility owners and operators tend not to think aboutclimatic zones. their usage, yet it is the easiest and fastest way to keep costs down. End-use efficiency can keepThe Alaska Building Science Network promotes energy prices stable while reducing the need for newenergy efficiency as an essential component of supply-side infrastructure, or providing the extradurable, safe, and affordable housing in Alaska. time to build that infrastructure. Careful project design can mitigate comfort issues that may ariseCooperative Extension Service of the University of from new lighting systems and different buildingAlaska Fairbanks operates the Energy and Housing controls.Program. This program focuses on providing the bestpossible housing technology information to Alaskan The technology is mature, but constantly evolving.home owners and builders. Owners and operators must keep current on the changes. Before implementing changes theyThere are five weatherization assistance program must assure proper testing has been completed.providers in Alaska and fifteen regional housing Conservation has a strong future in slowing theauthorities. Each provider is responsible for a advancement of global warming by reducing orspecific Alaskan region. The program providers are: displacing production of greenhouse gases from the electricity sector. RurAL CAP Tanana Chiefs Conference Efficiency and conservation easily become a way Interior Weatherization, Inc. of living. Constant education and outreach will be Alaska Community Development Corp. required to reinforce good habits. Safe removal Municipality of Anchorage and disposal (recycling) of old equipment should be ongoing. Much like the Federal Government does through mandatory reductions and use of alternatives, the State of Alaska should lead all of Alaska by example. 82
  • 83. Beaver Washeteria - Public buildingssuch as washeterias affordopportunties for energy projects, particu-larly space heating from biomassor waste heat recovery from diesel en-gines. The community of Tanana, forexample, installed two cordwood boilersin 2007 to heat their washeteria. 83
  • 84. HYDROELECTRIC POWER GENERATIONAEA Program Manager: Douglas Ott (771-3067) TECHNOLOGY SNAPSHOT: HYDROELECTRICInstalled Capacity (Worldwide) 654,000 MWInstalled Capacity (Alaska) Approximately 423 MW Resource potential exists throughout many areas of the state, with most developed projects in the southeast and southcentral portionsResource Distribution of the state; Alaska has 40% of U.S. untapped hydropower (192 billion Kwh energy potential)Number of communities/ 100+ (potentially +80% of Alaska’s population)population impactedTechnology Readiness Commercial (mature) Requires proper design to mitigate impacts to downstream aquaticEnvironmental Impact life, downstream water quality, and recreational uses Unit costs are variable and site specific. Where found to beEconomic Status economic, hydroelectric installations provide reliable, inexpensive renewable energy 84
  • 85. Introduction Technology OverviewA laska has enjoyed a long and rich history withhydroelectric power. By 1908, southeast Alaska H ydroelectric power is the generation of electric power from the movement of water flowing from aalone had over 30 developed water power sites with higher to a lower elevation. In contrast, hydrokinetica capacity of 11,500 kW. The vast majority, built technology (covered in a separate technology chapterby private developers, provided power for industrial in this report) is a pre-commercial technology thatoperations, mainly for the gold mining works in uses river current to generate electric power. AJuneau and on Douglas Island. Today hydropower hydroelectric facility requires a dependable flow ofin Alaska provides 24%1 of the statewide electrical water and a reasonable height of fall of water, calledpower. Major developers include the State of Alaska the head. In a typical installation, water is fed fromand public and privately owned utilities. These a reservoir through a conduit called a penstock into apower plants have proven to be long-term, reliable, hydraulic turbine. The pressure of the flowing waterand relatively inexpensive sources of power. on the turbine blades causes the shaft to rotate. TheHydropower installations have the reputation for rotating shaft is connected to an electrical generator,being robust and durable, operating successfully at which converts the shaft motion into electricalsome sites for more than a century. Hydropower’s energy. After exiting the turbine, water is dischargedlow operation and maintenance costs coupled to the river in a tailrace.with long lifetimes result in stable power rates. InAlaska, hydropower is currently the largest and mostimportant producer of electricity from a renewableenergy source. With increased interest in replacingfossil-fuel-powered generation with renewableenergy resources, the statewide inventory of installedhydropower capacity will continue to expand. Figure 2. Cross section of hydraulic turbine generator. Source: Army Corp of EngineersFigure 1.Typical High-Wall Reservoir Hydroelectric Dam Structure.Source: Army Corp of Engineers 85
  • 86. Technology OverviewBefore a hydroelectric power site is developed, To find the theoretical horsepower (the measure ofengineers must assess how much power will be mechanical energy) from a specific site, this formulaproduced when the facility is complete. They also is used:review the natural conditions that exist at eachsite: surface topography, geology, river flow, water THP = (Q x H)/11.81quality, and annual rainfall and snowfall cycles. where: THP = theoretical horsepowerExtensive studies are conducted to evaluate the site’s Q = flow rate in cubic feet perenvironmental conditions, land status and other second (cfs)factors that may influence the configuration of the H = head in feethydro plant and the equipment selection. 11.81 = a constantA given amount of water falling a given distancewill produce a certain amount of energy. The head A more complicated formula is used to refine theand the discharge at the power site and the desired calculations of this available power. It takes intorotational speed of the generator determine the type account losses in the amount of head due to frictionof turbine to be used. The greater the head, the in the penstock and variations due to efficiencygreater the potential energy to drive turbines. More levels of mechanical devices used to harness thehead or faster flowing water means more power.2 power. To determine how much electrical power canThe steep mountains, abundant rain and snow, and be produced, the mechanical measure (horsepower)relatively mild winter temperatures in Southeast and must be converted into electrical terms (Watts). OneSouthcentral Alaska provide the ideal hydrologic horsepower is equal to 746 watts (U.S. measure).conditions for hydroelectric power. Impulse and reaction turbines are the two most commonly used types. Other types of turbines include fixed pitch propeller and crossflow (also called the Ossberger or Banki turbines). Each has a specific operating range in terms of hydraulic head and power output. In order to optimize the power output and reduce capital costs, the specific turbine to be used in a power plant is not selected until all operational studies and cost estimates are complete. The turbine selected depends largely on site conditions. A reaction turbine is a horizontal or vertical wheel that operates with the wheel completely submerged, a feature that reduces turbulence. In theory, the reaction turbine works like a rotating lawn sprinkler, where water at a central point is under pressure and escapes from the ends of the blades causing rotation. Francis or Kaplan turbines are reaction machines that utilize both hydraulic pressure and kinetic energy toSouth Fork Drainage, Prince of Wales create rotating shaft work. Reaction turbines are theIsland, Southeast Alaska. type most widely used in Alaska.Source: Alaska Energy Authority, 2008. 86
  • 87. Technology OverviewAn impulse or Pelton-type turbine is a horizontalor vertical wheel that converts the fluid’s change inpotential energy (hydraulic head) into kinetic energyby water striking its buckets or blades to make theextractable rotating shaft work. Pelton or Turgoimpulse turbines may have single or multiple nozzlesthat accelerate flow to produce high velocity jetsthat impinge on a set of rotating turbine buckets totransfer their kinetic energy. The wheel is coveredby a housing, and the buckets or blades are shapedso they turn the flow of water about 170 degreesinside the housing. In contrast to a reaction turbine,the fluid contained in the impulse turbine does notcompletely fill all available void space, and theturbine operates at ambient pressure. After turning Source: Bureau of Reclamation, 2005.the blades or buckets, the water falls to the bottom ofthe wheel housing and flows out. Source: Bureau of Reclamation, 2005. 87
  • 88. Technology OverviewLow-Head Hydropower The output of the power plant is highly dependent on the drainage basin hydrology. Spring breakup will create a lot of energy, while flow diminishmentA low-head dam is one with a water drop of less during winter and dry seasons will create relativelythan 65 feet and a generating capacity less than little energy. A run-of-the-river power plant has15,000 kW. Large, high-head dams can produce little or no capacity for energy storage, and so cannotmore power at lower cost than low-head dams, but coordinate the output of electricity generation toconstruction of large dams may be limited by lack match consumer demand. Most run-of-the-riverof suitable sites, by environmental considerations, or applications are small economic conditions. The key to the usefulnessof low-head units is their lower capital costs andthe ability to satisfy local power needs with the Small, Mini, and Microavailable resource. HydropowerRun-of-the-River Small hydro is the development of hydroelectric power on a scale that serves a community or anRun-of-the-river hydro facilities use the natural flow industrial plant. The definition of a small hydroand elevation drop of a river to generate electricity. project varies, but a generating capacity of up to 10Facilities of this type are optimally built on rivers MW is generally accepted as the upper limit of whatwith a consistent and steady flow. is termed small hydro. Small hydro can be further subdivided into mini hydro, usually defined as lessPower stations on rivers with great seasonal than 1,000 kW, and micro hydro, which is less thanfluctuations require a large reservoir in order 100 kW. Micro hydro applications might serveto operate during the dry season. In contrast, for single families or small enterprises, while minirun-of-the-river projects do not require a large hydros might be appropriate for small communities.impoundment of water. Instead, some of the wateris diverted from a river and sent into a pipe called A small hydro plant might be connected to aa penstock. The penstock feeds the water downhill conventional electrical distribution networkto the power station’s turbines. Because of the as a supplemental source of renewable energy.difference in elevation, potential energy from the Alternatively, a small hydro project might be builtwater upriver is transformed into kinetic energy in an isolated area that would be uneconomic toand then to electrical energy. The water leaves the serve from a network, or in areas where there isgenerating station and is returned to the river with no electrical distribution network. Small hydrominimal alteration of the existing flow or water projects usually have minimal reservoirs and civillevels. With proper design, natural habitats are construction work, consequently a relatively lowpreserved, reducing the environmental impact. environmental impact.Run-of-the-river power plants typically have a A large and growing number of companies offerweir or diversion structure across the width of the standardized turbine generator packages in theriver. This weir contains an intake structure, often approximate size range of 200 kW to 10 MW. Theseconsisting of a trash rack, an intake screen, and water-to-wire packages simplify the planning andde-sanding elements to conduct the water into the development of the site, since one vendor looks afterpenstock. These installations have a small reservoir most of the equipment supply.behind the diversion to keep the intake flooded andreduce icing problems.88
  • 89. Technology OverviewNon-recurring engineering costs are minimized, river hydroelectric generators are able to deliver aand development cost is spread over multiple relatively consistent electric supply throughout theunits, so the cost of such systems is improved. day.While synchronous generators capable of isolatedplant operation are often used, small hydro plants Run-of-the-river hydroelectric generators in Alaskaconnected to an electrical grid system can use do not provide the same seasonally consistenteconomical induction generators to further reduce electric supply that larger hydroelectric projectsinstallation cost and to simplify control and do. This is a result of the seasonal changes in theoperation. flows of Alaska rivers, with diminished flow rates during the winter months. The dams and reservoirsMicro hydro plants may use purpose-designed of larger hydroelectric projects provide for energyturbines or industrial centrifugal pumps connected storage, holding water to be used to generatein reverse to act as turbines. While these machines electricity when flows are lower. Unfortunately,rarely have optimum hydraulic characteristics when most Alaska electric loads are highest during theoperated as turbines, their low purchase cost makes winter, the same time that river flow (and the electricthem attractive for micro hydro class installations. power generation capability of small and run-of- the-river hydro) is at its lowest. This lowers theRegulation of small hydro generating units may amount of run-of-the-river hydro capacity that canrequire water to be spilled at the diversion to be installed without significant amounts of excessmaintain the downstream stream habitat. Spilling capacity in the summer.will also happen when the natural flow exceeds thehydroelectric system capacity, since the project will Conventional Hydroelectricgenerally have no reservoir to store unused water.For micro hydro schemes feeding only a few loads, Storage Projectsa resistor bank may be used to dissipate excesselectrical energy as heat during periods of low When suitable hydraulic heads are not presentdemand. In a sense this energy is wasted, but the or when power needs are substantial, dams areincremental fuel cost is negligible so economic loss constructed across rivers to store water and createis minor. hydraulic head to drive the turbomachinery. Dams typically last for 50 to 100 years and so, areSince small hydro projects may have minimal constructed of durable materials like reinforcedenvironmental and licensing procedures, the concrete, roller-compacted concrete, earth, andequipment is usually in serial production. Civil crushed rock. Smaller dams may be constructed ofworks construction is also limited. The small size of steel or timber crib design. They vary substantiallyequipment also makes it easier to transport to remote in terms of height and storage volume, dependingareas. Fore these reasons, small hydro projects may upon local topography. There are several designreduce development time. approaches used for concrete dams, including solid and hollow, gravity and arch geometries.Small hydro and mini hydro can be used asalternative energy sources in off-grid communitieswith small loads. Small hydro tends to dependon small water turbines fed directly by rivers andstreams. When compared with other renewableenergy alternatives like wind and solar, run-of-the- 89
  • 90. In addition to the actual dam structure, there are a with hydro energy storage an attractive option fornumber of other major design considerations. For integrated supply systems.example, the penstock inlet manifold (usually with Additionally, the scale of energy productionscreens to keep debris and fish from entering the attainable with hydroelectric storage lends it toturbine) and the discharge or tailrace system must connection with large electrical grids to displacebe designed to maintain the hydraulic head and conventional fossil fuel-based power sources withminimize the effects of sedimentation, silt, and ice clean, non-carbon-based power. Fuel switching tobuild-up. Substantial effort goes into the design inexpensive hydropower may be possible in someof the dam spillway to safely direct extreme flows situations for home heating and (someday) for plug-downstream of the dam when the available reservoir in hybrid is inadequate to contain it.Where the topography allows, several successfuldesign concepts are available to help mitigate theenvironmental impacts of conventional storagehydropower projects. In regions with high-elevationnatural lakes, lake taps may be utilized to feed apower tunnel bored in rock to carry water to thedownstream powerhouse. This approach reduces theneed to construct a dam; the tunnel serves in placeof the penstock; and the lake is utilized as a naturalstorage reservoir. At other sites, natural barrierwaterfalls can facilitate licensing of upstream hydrodevelopment through their function as fish migrationbarriers. Fish protection and passage facilitiesand eco-friendly turbines can also be designed tomitigate fisheries impacts of hydroelectric facilityconstruction. In order to be constructible, allhydro projects must pass rigorous assessment.Environmental effects must be determined. Power Creek Hydro projectMitigation measures, compliance monitoring,and environmental follow-up programs must beestablished.A strong attribute of conventional hydropoweris the dispatchability that results from the abilityto control the rate of power production throughstorage and release of water contained behind thedam. Given the general increase in electrificationthat is occurring worldwide, the demand for usinghydropower reservoirs for both base-load andpeaking applications is rising. Other factors mayalso lead to increased interest in conventionalhydropower. The variable nature of other renewableenergy sources like wind and solar makes pairing 90
  • 91. Potential Reduction in Cost of EnergyT he Alaska Division of Energy published theRural Hydroelectric Assessment and Development Working Group Recommendations found later in this narrative). The data identified from this process have been incorporated into the energy plan’s masterStudy in 1997. The study developed a database database of energy technologies. Though not allof existing and potential hydroelectric projects in sites are economic at today’s fuel prices, some 99Alaska. At that time, a total of 1,144 potential sites have been identified in this screening as havinghydroelectric sites were screened, resulting in two potential for future hydro development. Furtherpotential projects with positive net benefits. These information on these sites is available upon request.two projects, and another two that were close topotential positive net benefits were subjected toadditional engineering review.In 2007 Crimp, Colt, and Foster updated the capitalcost estimates in the hydroelectric project databaseto year 2005 dollars.3 The estimated capital cost perinstalled kW in 2005 dollars ranged from $1,500 to$250,000 (mean = $25,800). Annual operation andmaintenance (O&M) costs for each hydro projectwere also estimated for the project’s screeningprocess in the earlier study, generally equal to 3% ofcapital cost. Project viability was re-screened underpessimistic, mid-case, and optimistic scenarios.The high capital cost of hydro (both absolute andespecially on a per kW basis for smaller projects)is the chief impediment to its economic feasibility.This cost tends to decrease over time as theoriginal capital costs are paid down from powersales revenue and the low O&M cost features ofhydropower prevail, however, higher fuel prices inthe 2007 analysis, relative to those considered in1996, were sufficient to propel several projects intothe ranks of potentially feasible projects.As part of the state energy plan process, a newscreening of available hydro site studies andinvestigations was conducted by AEA. Utilizing ateam of hydropower experts (the Hydro TechnologyWorking Group) as a sounding board, this teamtook a fresh look at potential hydro sites closest toexisting communities and used a variety of highlevel screens to identify the sites most viable forfurther investigation. See the Hydro Technology 91
  • 92. CASE STUDIEST he State of Alaska studied, built, or consideredbuilding several large hydroelectric facilities in theearly 1980s, when state coffers were flush and oilprices were high. With the low natural gas prices ofthe late 1980s and 1990s, it appeared that many ofthese hydroelectric projects were uneconomical witha cost/benefit ratio under 1. These projects may nowhave net benefits with the recent increase in prices.As a result of the large upfront capital costs of thesefacilities, screening for their economic viabilityand benefits is vulnerable to assumptions aboutoil and natural gas prices and the actual swings intheir market prices. These projects could benefitfrom a longer-term assessment and assumption ofstatistical ‘most probable diesel’ and natural gasprices. The state’s roles as proponent, developer,engineer, rate payer (through the Power CostEqualization program), regulator, and bankerthrough its various agencies and fiduciary bodiesalso result in conflicting tensions when assessingproject feasibility. Yet, large infrastructure projectsare typically financed with public dollars under thephilosophy that the public enjoys the derived benefitsfor many years after the project’s completion. 92
  • 93. Case Study: Four Dam PoolT he Four Dam Pool projects are fourhydroelectric facilities (dams and lake tap projects) The projects were originally owned by the State of Alaska, Alaska Power Authority, with electricity sold to local utilities through Power Salesbuilt by the State of Alaska in the early 1980s Agreements. In January 2002, AIDEA loaned upin Kodiak, Valdez/Glennallen, Ketchikan, and to $82 million to the utilities to acquire the damsWrangell/Petersburg. The State paid for a portion from AEA: $77 million for the dams and up to $5of the dams, and it provided loans through the million to construct an intertie between the SwanPower Development Revolving Loan Fund for the Lake hydroelectric project and the Lake Tyeeremainder of the cost. The total cost for the project hydroelectric project to move surplus energy fromin 2007 dollars is estimated at $811 million: $493 Wrangell/Petersburg to Ketchikan.5 The Swan-million in state funding, and $318 million in grants Tyee Intertie is expected to cost over $100 millionand loans.4 when construction is completed in 2009. The Alaska legislature provided for non-payment or forgiveness of a non-current loan owed to the AEA upon closing of the bond sale; this was the outstanding balance of the original loans.6 Facility Name Communities Served Swan Lake Ketchikan Tyee Wrangell and Petersburg Terror Lake Kodiak Solomon Gulch Valdez and Glennallen 93
  • 94. Case Study: Bradley Lake Hydroelectric ProjectT he Bradley Lake hydroelectric project wasconstructed by the Alaska Power Authority on the individual utilities are located across the state, mostly in Southeast Alaska. There are also some very smallKenai Peninsula near Homer, Alaska. The Alaska private facilities, most of which are owned by fishlegislature appropriated $168 million for what was processors.estimated to be a $245 million project. The project,which cost over $300 million (including reserve fund A list of the larger facilities serving utilities follows:balances, of $479 million 2007 dollars), went intocommercial operation in 1991. The project includes Facility Installed Capacity (MW)a concrete-faced and rock-filled gravity dam, 610 Annex Creek 3.6 Beaver Falls 5.4foot long, 125 foot high, and a 3.5-mile power tunnel Black Bear Lake 4.5and steel-lined penstock. The project transmits Blind Slough 2power to the state’s main grid via two parallel 20- Blue Lake 6mile transmission lines. Homer Electric Association Bradley Lake 126under contract with AEA now operates the project. Chester Lake 1Bradley Lake serves Alaska’s Railbelt from Homer to Cooper Lake 16.7Fairbanks as well as the Delta Junction area.7 Dewey Lakes 0.9 Eklutna 30The power from Bradley Lake is shared among the Falls Creek 0.8Railbelt utilities via the intertie, according to a formal Goat Lake 4sharing agreement. Gold Creek 1.6 Green Lake 18.6Utility Share of Bradley Lake Share Humpback Creek 1.3Chugach Electric Association 30.4% Kasidaya Creek 3Anchorage Municipal Light and Power 25.9% Ketchikan 4.2Homer Electric Association 12.0% King Cove 0.85Matanuska Electric Association 13.8% Lake Dorothy 14.3Seward Electric Utility 01.0% Larsen Bay 0.4Golden Valley Electric Association 16.9% Pelican 0.7 Petersburg 2Also in Southcentral Alaska, the Eklutna hydroelectric Power Creek 6facility was brought on line in 1955 by the federal Purple Lake 3.9government. In 1994 it was taken over by Anchorage Salmon Creek 6.7Municipal Light & Power. As the cheapest energy Silvis 2.1source connected to the Railbelt energy grid, it Skagway 1currently produces power at a rate of a few cents per Snettisham 78 Solomon Gulch 12kWh. South Fork Black Bear 2The Cooper Lake hydroelectric facility is owned and Swan Lake 22.4operated by Chugach Electric Association. It began Tazimina 0.8operation in 1960 and was recently relicensed by the Terror Lake 20Federal Energy Regulatory Commission. Tyee 20A number of smaller hydroelectric projects owned by Total 423.35 MW 94
  • 95. Case Study: Southeast AlaskaH ydroelectric generating facilities and dieselgenerators provide a significant portion of theelectric power generation in Southeast Alaska. Thestate and the federal government, as well as certaincommunities and utilities have developed existinghydroelectric generating plants in Southeast Alaska.Hydroelectric facilities provide the majority of thepower requirement in Juneau, Ketchikan, Sitka,Petersburg, Wrangell, Skagway, Haines, Metlakatla,Craig, and Klawock.8 The largest in Southeast Alaskais the Snettisham hydroelectric facility, providing80% of the power used by Juneau and Douglas. Builtby the USCOE in the 1979s, and sold to the State ofAlaska in 1998, Snettisham is operated by AlaskaElectric Light and Power under contract with AIDEA.In some communities the hydroelectric facilitiesare capable of providing electricity in excess of thecommunity load. In response, electric customers inthese communities are replacing or supplementingdiesel space and water heating systems with electriconce. If enough customers convert to electricheating, the surplus electric capacity will dissipateand diesel generators will be needed to meet the loadrequirements. One method of addressing this issueis interruptible electric space and water heating whenreservoir levels are low or electric use is high duringthe winter. During low water years in Sitka, the utilityhas had to ask people to heat with wood or diesel9while it interrupts electric service to electric heaters.10Transmission line damage from avalanches disruptedthe flow of hydroelectric power from the Snettishamhydro project to Juneau for six weeks in 2008. Duringthis period, power was restored using back-up dieselgeneration at roughly 5x the power sales rate of Snettisham Hydroelectric facility. Above: Long Lake;Snettisham hydropower. Below: Outside view of the Snettisham Hydroelectric facility. 95
  • 96. Case Study: South Fork Prince of Wales IslandM any communities on Prince of Wales Islandare electrically intertied and are supplied powerprimarily from the Black Bear Lake hydro project(BBL).11 However, over the last 10 years systemload growth fully utilized the capacity and energyavailable from BBL. Supplemental diesel-poweredgeneration was required to meet this increaseddemand. To minimize dependency on high-cost diesel-generated energy, Alaska Power &Telephone Company began investigating renewableresource energy sources on the island. Researchled to the selection of South Fork enhanced by itsclose proximity to existing roads and power andcommunication lines servicing BBL,as the mostfeasible project.With grant/loan assistance from the Denali South Fork Impoundment.Commission and the Alaska Energy Authority,construction of this 2 MW run-of-the-riverhydroelectric project began in the spring of 2004 andcame on line December 2005. AP&T was the generalcontractor of the project, securing necessary permits,providing engineering design, and constructing theproject with their own work force and seasonal labor.The South Fork hydroelectric facility has alreadyaccumulated over 1,000 hours of operation,supplementing the BBL facility. The power plantcontrols were incorporated into the BBL SCADAsystem, enabling plant operators to remotely monitorand control the new facility. While South Fork haslimited storage capacity, it will significantly reducethe energy requirement from BBL, enabling BBL tomaintain water in storage for low rainfall periods.This will significantly reduce the area’s dependenceon diesel-generated energy. 96
  • 97. New Hydro ProjectsT hree hydropower projects are now underconstruction in Alaska. Falls Creek near Gustavus Corp of Engineers reconfirmed the feasibility of Susitna River hydropower development. In 1980is being built by Gustavus Electric Company, the Alaska Power Authority (now Alaska EnergyKasidaya Creek, between Haines and Skagway, by Authority) was commissioned a review of studiesAlaska Power and Telephone Company, and Lake to date and a comprehensive feasibility study toDorothy by Alaska Electric Light and Power.12 determine whether hydropower development onFERC licenses have also been issued for hydropower the Susitna River was a viable option.14 Based onprojects at Reynolds Creek and Mahoney Lake, and these and other studies and the urging of the Alaskasoon to be issued for Whitman Lake. Legislature, the AEA submitted a FERC license application in 1983. The license application was amended in 1985 for the construction of a two-dam,Recent Grant Applications three phase construction project. The estimated cost of that project was $5.9 billion.AEA sought interest in study and developmentof alternative and renewable energy projects Arriving at a plan for bond financing was found to bethrough three different grant application cycles difficult for a project of this scale, one which was toin 2008. Applications for hydropower project be constructed in phases over a 20-year time period.development and construction have been received Cash payment of a portion of the construction costsfor 64 projects. Requested grant funds total $159.8 was proposed as a means of reducing power costs tomillion for facilities costing $3.35 billion in capital customers.15costs. Because the applications are currently underreview and funds requested exceed grant funds As a result of the high cost of the project, theavailable, not all applications will receive the relatively low cost of gas-fired electrical generationamount requested. However, this information is an in the Railbelt, and the effect on the state budgetindication of the current level of interest in hydro of the declining price of oil in the early 1980s, thedevelopment in Alaska. project was terminated by the Board of Directors of the Power Authority in March 1986. At thatChakachamna Hydroelectric point, approximately $227 million had beenProject appropriated to the project from FY79-FY86 ($382 million 2007 dollars) and $145 million had beenThe Chakachamna hydroelectric project is currently spent. Extensive field work, biological studies, andunder study by TDX Power. Located on the activities to support the FERC license applicationwestern side of Cook Inlet, the project would entail were conducted with these funds. Though thea lake tap, 12-mile power tunnel, and a 40-mile conclusion reached in 1986 was that the impacts oftransmission line extension to provide 330 MW of the project were manageable, the license applicationenergy to the Railbelt grid at 1600 MWh annually. was withdrawn. The project data and reportsOriginally studied by the Alaska Power Authority in were archived to be available for reconsiderationthe 1980s, the project as currently envisioned would sometime in the future.divert water from the Chakachatna River to the More recently the Alaska Energy Authority wasMcArthur Drainage Basin. authorized $2.5 million in funding to perform aSusitna Hydroelectric Project Susitna Hydro Feasibility Study and Cost Estimate as part of the FY 2009 Alaska capital budget. TwoThe hydroelectric potential of the Susitna River distinct tasks were identified in the legislation. First,has been studied over many decades.13 The initial the 1984 cost estimate for construction of the Susitnastudies were done by the Bureau of Reclamation hydro project using current construction and designin the early 1950s; in the 1970s , studies by the technology will be reviewed and updated ($1.5 97
  • 98. New Hydro Projectsmillion). This renewed analysis will produce four development schemes and their associated capitalalternatives of development for the project, with output and costs. • Where excess hydropower is available, fuel switching to electric home heating is likely toSecond, a Railbelt wide integrated resource and occur in communities with low-cost hydropower.transmission study will consider the four incremental This impact will substantially increase the powerSusitna development alternatives, in conjunction sales.with other Railbelt wide generation projects • The work group recommended a 50-year working(1.0 million). The analysis will make use, to the life be used in economic evaluation of hydromaximum extent possible, of the phased project facilities.development considered in 1984, but key to the • Pumped storage hydro projects are not viable inanalysis will be new assessment of long-term Alaska at present, since the power rate structureRailbelt load growth, and matching the project the currently used by utilities here offers no raterealistic future Railbelt needs. differential for peak versus off-peak generation;This integrated resource plan will yield an if possible this could be feasible for energyeconomic plan for construction of power storage, should large wind farm generation begenerators, transmission lines, and fuel aggregation brought online in the future.infrastructure to meet the capacity, energy and • Research is needed to discover ways to reducereliability needs of the Railbelt over the next 50 intake icing conditions and integrate schemesyears. The plan will include creation of a diversified for small hydro in village settings. Needed alsopower portfolio, and robust transmission system by are standardize plans for propeller and crossflowyear 10 that can supply reliable postage stamp rate turbine runners (to reduce manufacturing costspower for all Railbelt utilities. The Susitna project and promote use of materials such as compositewill be a key economic element in the creation of blades and others not requiring extensivethis plan. metal casting), to utilize heat recovery for heat load dumps used for hydro energy frequencyAccording to a November 2008 presentation to the regulation. Tests on coanada intake screens forAlaska Energy Authority, the two dam configuration cold weather hydro applications are needed, asof the Susitna hydro project would be capable of are water conservation schemes for preservationproducing approximately 7 million MWh annually.16 of reservoir storage during frequency regulation. Standardized plans for small hydro applicationsHydro Technology Work Group such as intakes, powerhouse, induction plants,Recommendations and tailraces are needing research. Alaska- friendly fish passage designs for in and outThe hydro technology work group met several times of a lake/reservoir, how best ways to provideduring the summer and fall of 2008. The work for flushing flows and sediments to replenishgroup membership consisted of consulting engineers, spawning gravels in fish streams, optimal winterresource managers, interested citizens, and AEA instream flow releases for traditional hydropowerpersonnel. Assistance was provided in selecting the projects, and improved methods to predict snowsteps in the hydro resource screening and evaluation. melt and runoff for modeling reservoir operationsThe working group provided peer review and • The group recommended that prior hydro studiesvalidation of preliminary screening results. Specific be made available online to promote futurerecommendations of the group included the development opportunities.following: • The group recommended working toward the• Hydro projects do not lend themselves to establishment of a fair, efficient, and timely utilization of unit cost factors in preparing authorization permitting process for new estimates of capital cost; rather, site-specific hydropower projects, particularly for run-of the- analysis is required to arrive at optimal hydro river hydros. 98
  • 99. ConclusionsT he future looks bright for hydropowerdevelopment in Alaska. Hydroelectric projects Alaska Energy Authority, Susitna Project Files, SusitnaEnergyEstimatesFINAL_Nov08.pdfproduce power that is reliable, renewable and non-polluting. Though they can be expensive to license Alaska Energy Authority, Financial Statements, June 30,and construct, hydroelectric facilities produce long- 2002, p. 15.term dividends of power sales at some of the lowestcost rates available today. Hydropower rates are not Alaska Energy Authority project descriptions:subject to the price swings and escalation that fossil experience. Careful project design can mitigateenvironmental impacts that are resolved during the Alaska Department of Labor and Workforce Development,licensing stage in collaboration with resource agency Consumer Price Index, March 2003.consultation. Alaska Industrial Development and Export Authority Revolving Fund, Financial Statements, June 30, 2002, p.Hydropower technology is mature and not subject performance risks inherent with some of the APRN, 2008. energy technologies that have yet to reach back-even-further-on-electric-usage/commercial-stage development. Alaska has abundanthydroelectric potential, especially in the Southcentral Crimp, Peter M., Steve Colt and Mark A. Foster,and Southeast portions of the state; other potential 2007, Renewable Power in Rural Alaska: Improvedsites are available in the Aleutians, Southwest, and Opportunities for Economic Deployment, prepared for thethe Interior. Transmission of power from large hydro Arctic Energy Summit.sites can be accomplished through grid interties toneighboring communities, thus displacing fossil fuel Dzinich, Kurt, Susitna Hydropower Options, Alaska Stategeneration. Hydropower integrates well with wind Legislature, Senate Advisory Council, February 26, 1986.power in community power systems. It has a strong Fay, Ginny, State Funding for Power Cost Equalizationfuture in retarding the advancement of global warming and Four-Dam Pool Projects and an Overview of Proposedby reducing or displacing production of greenhouse Railbelt Electrical Intertie Proposals, Alaska Stategases from the electricity sector. The domestic Legislature Research Agency, Research Request 90.142energy security available from utilizing hydropower (revised), December 6, unsurpassed and promotes the goal of energyindependence. Fay, Ginny and Gretchen Keiser, Railbelt Energy Analysis,In its latest World Energy Outlook published Alaska House of Representatives Research Agency,in November 2008, the International Energy Research Request 87.114, March 18, 1987.Agency has requested decisive action to secure Juneau Empire, 2008. of affordable, reliable energy and create stories/103108/reg_350325319.shtmlan environmentally benign energy system. The Leavitt, Richard, Glen Martin, and Corry Hildenbrand,development of hydroelectric facilities is a positive Small Hydro Construction in Alaska. Hydro Review, Vol.response to that call for action. xxvii, November 2008. pp. 36-43.References Legislative Affairs Agency, Legislative Finance, TPS Report 50454.Alaska Energy Authority, Alternative Energy,Hydroelectric website Alaska Energy Authority, Renewable Energy Atlas of Alaska. July 99
  • 100. Southeast Alaska Intertie Study, 2003. http://www.aidea. 10 Juneau Empire, 2008. stories/103108/reg_350325319.shtmlTeal, David, Susitna Feasibility, Alaska State Legislature 11 Alaska Energy Authority, Alternative Energy, Hydro-Research Agency, Research Request 83.137, May 13, 1983, electric website, 2. 12 Leavitt, Richard, Glen Martin, and Corry Hildenbrand,Tester, Jefferson, Elisabeth Drake, Michael Golay, Small Hydro Construction in Alaska. Hydro Review, Vol.Michael Driscoll and William Peters, Sustainable Energy – xxvii, November 2008. pp. 36-43.Choosing Among Options, MIT Press, 2005. 13 Unless otherwise cited, information on the Susitna hy-U.S. Department of the Interior, Bureau of Reclamation, droelectric project is from: Dzinich, Kurt, Susitna Hydro-Power Resources Office, Hydroelectric Power, July 2005. power Options, Alaska State Legislature, Senate Advisory Council, February 26, 1986.Footnotes 14 The Susitna Hydroelectric project was actually a series1 Renewable Energy Atlas of Alaska, Alaska Energy Au- of dams on the Susitna River.thority, July 2007. P. 10. 15 Teal, David, Susitna Feasibility, Alaska State Legisla-2 U.S. Department of the Interior, Bureau of Reclamation, ture Research Agency, Research Request 83.137, May 13,Power Resources Office, Hydroelectric Power, July 2005. 1983, p. 2. Alaska Department of Labor and Workforce Development, Consumer Price Index, March 2003.3 Crimp, Peter M., Steve Colt and Mark A. Foster, 2007,Renewable Power in Rural Alaska: Improved Opportuni- 16 for Economic Deployment, prepared for the Arctic gyEstimatesFINAL_Nov08.pdfEnergy Summit.4 Fay, Ginny, State Funding for Power Cost Equalizationand Four-Dam Pool Projects and an Overview of ProposedRailbelt Electrical Intertie Proposals, Alaska State Legisla-ture Research Agency, Research Request 90.142 (revised),December 6, 1989.5 Alaska Industrial Development and Export AuthorityRevolving Fund, Financial Statements, June 30, 2002, p.22-23.6 Alaska Energy Authority, Financial Statements, June 30,2002, p. 15.7 Southeast Alaska Intertie Study, 2003. APRN, 2008. 100
  • 101. Wind Energy TechnologiesAEA Program Manager: Martina Dabo (771-3027) Wind Turbine at Selawik TECHNOLOGY SNAPSHOT: Wind Installed Capacity Over 100,000 MW worldwide (Worldwide) Installed Capacity 4,505 kW installed; 4,415 kW under construction (Alaska) Resource Potentially available to communities in all regions of Alaska although generally Distribution focused in coastal areas and throughout low-lying delta plains. Number of At least 134 rural communities have viable wind resource. Additional communities communities along the Railbelt have yet to be assessed. impacted Wind-diesel systems are commercial to early-commercial depending on level of wind Technology penetration to existing load. Larger turbines appropriate for the Railbelt are fully Readiness commercial. Impacts on local and migratory bird populations although little impact currently Environmental documented. Potential for noise and visual impacts when sited close to a community. Impact Most impacts can be minimized by appropriate siting, design, and operation. Wide disparity on payback. For rural areas payback is highly dependent on associated Economic Status balance of system costs and price of offset diesel fuel. 101
  • 102. IntroductionW ind is caused by temperature and pressurefluctuations in the atmosphere as the sun warms the the Alaska Energy Authority website at http://www. Wind devices are powered by air. Air moving html. Various publications like Wind Power:relative to an object such as the blades of a wind Renewable Energy for Home, Farm, and Business,turbine (or the winds of a plane) imparts a force on by Paul Gipe (2004), might also be helpful.that object. In rural communities now using diesel generators,Wind turbines use this aerodynamic force to convert it is important to understand that wind energythe kinetic energy of the wind into mechanical alone cannot replace diesel generation. In mostenergy that can be harnessed for use. The energy in applications, when the wind is blowing, wind energythe wind can be defined for a specific unit of area is used to reduce dependence on and consumption ofthat the wind is flowing through in a unit of time. diesel fuel. Diesel power is relied on when availableWind energy is directly related to the area swept wind energy is insufficient. These wind-dieselby the turbine blades, air density, and the cube of power systems are described in greater detail in thewind speed. A doubling of the wind speed increases next section.the power from the wind by eight times. For thisreason, the most important factor in calculating Alaska has significant potential for wind technologywind power is determining wind speed. This fact is development throughout the state, but the bestimportant when considering the integration of wind resources are concentrated near the coast and on theinto existing power systems. In most instances we large coastal plains and river deltas, like the Yukon-need our power to be constant, and wind energy is as Kuskokwim region. Communities in interior Alaskavariable as the blowing wind. may also have wind resources, but they are generally confined to passes, hills, or ridge tops. In nearly allA wind turbine generator (WTG) uses a wind cases, specific assessments will likely be required.turbine rotor, with turbine blades to transform windenergy into mechanical energy; and a generator, to Obvious opportunities exist, but there aretransforms that mechanical energy into electrical environmental and technical challenges related toenergy. Many different types of wind turbines are the deployment of wind devices in Alaska. Some ofavailable. Sizes vary. Small (10 kW or less) wind these challenges are common to installations in anyturbines which are typically used for individual location, while others are more specific to or small businesses. Medium-sized (50kW - Most environmental concerns relate to potential1000kW) ones are used for remote communities and impacts on birds. Often, coastal regions with goodother grid-connected, distributed generation. Large wind resources also have strong bird populations,turbines (1MW or more) are generally used in large including the King Eider, Black Scoter, and thewind farms. Steller’s Eider, which is an endangered species. Two general laws govern turbine impacts on birds,This section focuses on medium and large wind the Endangered Species Act and the Migratory Birdturbines. without addressing the application of Treaty Act. At this point there is a limited amountsmall wind turbines. More information on small data on the impacts of Alaska’s current wind projectswind turbine applications can be found on the Wind on local species and population.Powering America, small wind website at http:// Survivability and performance of turbines in, or102
  • 103. Arctic is another consideration. Wind turbineperformance in Alaska has been good, however thereis relatively limited information due to the smallnumber of installed wind systems. Additionallythere is little in-state maintenance support formost wind turbines at this time, however, with thecontinued growth of wind power in Alaska, thisexpertise is being developed. Some areas of Alaskaare also subject to substantial amounts of rime icingand extremely low temperatures, these conditionsmay have a significant impact on wind turbineperformance and reliability.Challenges still exist with the integration of windtechnologies into new or existing diesel power plants.Combined systems can be complex, and care must betaken during the development of the project to insurethat the resulting system will perform satisfactorily.Also, the operational complexity of the systemchanges as the amount of wind energy increases ascompared to the load.Although a wind map has been completed for thestate, additional local wind assessments are required tojustify project development on any meaningful scale.The installation of an anemometer and collection ofenough data to understand the local wind resource cantake over a year.By the end of 2008, nine remote communities willhave wind turbines installed. An additional six projectswill be under construction. There is a single 100kW wind turbine installed on the Railbelt near DeltaJunction. Studies are being undertaken to assess other,much larger projects from Homer to Fairbanks. 103
  • 104. Wind Power Technology OverviewT here are many different wind turbine designs,but all of them have things in common. The main Wind Turbine Performance For any location with a known wind resource,component that transforms the wind energy into there are several factors that can be used to predictmechanical energy is the rotor, which includes the electrical generation from a wind turbine. The mostblades. Based on this commonality, wind turbines important include the power curve, the cut-in windare classified by the structure of the rotor and its speed, the rated wind speed and power output, andlocation in the airflow. The two main types of wind the cut-out wind speed. These factors along withturbine are horizontal axis and vertical axis, referring turbine availability all contribute to the capacityto the axis of the blade rotation. At this time, the factor of a turbine. All of these terms are explainedonly type of configuration commercially available in more details as follows.for medium and large installations is the horizontalaxis turbine, so it is the only one considered here. Wind Turbine Power CurveThe rotor of a horizontal axis wind turbine The main way to assess the performance of arotates around a horizontal axis, parallel to the wind turbine is through the examination of a windwind direction. The blades of the rotor are turbine power curve, (see in Figure 1). On thearranged rigidly in a plane, that is always oriented vertical axis, the power curve depicts the expectedperpendicular to the wind. These turbines generally electrical output of the turbine, at specific windhave an eclosed part or nacelle that houses all of the speeds, which are shown on the horizontal axis.wind turbine’s mechanical infrastructure such as the Wind turbine power curves can be calculated eithergenerator, gearbox, break, and power electronics. based on the design of the turbine, or measuredWhile most smaller wind turbines have a tail, tails from actual turbine operation. For smallerare not common on larger turbines. All horizontal permanent magnet generators it is especiallyaxis wind turbines are mounted on top of a tower, important to get a measured power curve from awhich is either tubular or lattice frame in design. manufacturer since this curve can be different from the calculated version. Furthermore, a power curve is not universally valid. It depends on turbulence, atmospheric pressure, and ambient temperature at the measuring location. A power curve is usually corrected to sea level and 68°F ambient temperature. Cut-in Wind Speed The lowest wind speed at which the turbine will generate power is called the cut-in wind speed. Although at face value this parameter should be clear, there are several nuances. Because of the mass of the rotor, a spinning turbine will produce power at a lower wind speed than a turbine starting from a standstill. If the power curve is calculated based on the properties of the turbine, the cut-in wind speed tends to be lower, as it does not account for the rotational mass of the rotor. A low cut-in wind speed is generally desired, since this translates to more time when the turbine is producing at least some power. 104
  • 105. Wind Power Technology OverviewRated Wind Speed and Rated Output to the survival wind speed, while non-furling turbinesPower will not be operating at wind speeds higher than the cut-out wind speed. The survival wind speed isThe rated wind speed and output power are relative really more of an insurance or a safety consideration,values that give an indication of wind speeds as wind turbines typically do not suffer any damagerequired for the turbine to produce large amounts from winds higher than the stated survival speeds.of power. If the rated wind speed for the turbine ismuch higher than the typical wind speed for the site,it is probably not a good turbine to use. There will be Availabilitylittle time when the turbine is producing significant Availability describes the amount of time that a windamounts of power. Usually, a generator with lower turbine is ready to produce energy. It is definedrated wind speed is better than a similar one with a as the ratio between the number of hours the windhigher rated wind speed. This is because the turbine turbine operates divided by the number of windywith a lower-rated wind-speed will reach fall rated hours over the same time period. A high availabilityoutput under more likely wind speeds. describes a turbine that is producing power whenever the wind is blowing. Availability is a term used toCut-out Wind Speed describe the operational and maintenance conditionCut-out wind speed defines the speed at which the of the wind turbine. In modern wind turbines,wind turbine is designed to be shut down to prevent availabilities over 95% are expected. For small winddamage to the wind turbine. The wind speed is turbines, availability over 99% is not unusual.usually monitored by the turbine control system,and if the cut-out wind speed is reached, the turbine Capacity factorbraking system is applied and the turbine will notoperate. Typical cut-out wind speeds are around 25 Wind turbine capacity factor describes the amountm/s (56 mph). By oversizing specific components, of energy that the wind turbine produces comparedwind turbines can be designed to have higher cut- with theoretical production if it were running atout wind speeds. Small wind turbines with furling full, rated power. The capacity factor is reportedmechanisms do not have a cut-out wind speed. over a fixed time period, usually a month or a year,Instead, as the wind speed increases, the furling and is calculated by dividing the turbine’s energymechanism engages, turning the turbine rotor out of production over that time by the energy productionthe wind, and thus reducing the turbine strain and if the turbine were running at rated power over thepower output. same time period. Capacity factor describes the power production expectations of the wind turbine.Survival Or Maximum Wind Speed It is most strongly related to the wind resource at the site. Capacity factors of 25%-40% are typical, whileThe survival wind speed is the maximum wind speed values up to 60% have been reported.that the wind turbine is designed to withstand safely.Most wind turbines have a specified survival windspeed of 50 m/s - 65 m/s (112 mph - 145 mph), andin many cases this value is regulated by nationalstandards. Wind turbines can also be specified to havehigher survival wind speeds for installations in unusualor special environments. Small wind turbines withfurling mechanisms will still be generating power up 105
  • 106. Wind Power Technology OverviewWind Turbine Types Turbine Design Types As would be expected with any power generation Interconnecting a wind turbine into a remote technology, not all wind turbines are created equal. or weak grid network can be complicated, and Additionally, specific design features make some specific wind turbine design characteristics play a turbines more appropriate for remote or Alaskan key role in determining just how hard the job will installations. One of the primary problems with be. Traditional wind turbines with a synchronous wind turbines installed in rural Alaska during the generator, stall regulated control, and no power 1980s (many remains of which can still see be electronics can cause large power spikes and/or seen), is that little thought was given to appropriate power variability depending on the wind conditions application of the turbines or the long-term or during start-up. Turbines using synchronous sustainability of the projects. generators but active pitch control allow better or smoother power quality. Variable speed wind turbine technology with active pitch control can actuallyWind Turbine Class And Certification allow the control system to specify a desired power The International Electro-Technical Commission output from the turbine, as opposed to being limited (IEC), an international standards development to accepting whatever energy the turbine produces. organization, has developed a classification system Additional devices may also be purchased to smooth for wind turbine systems. It specifies the design out power fluctuations from the wind turbines, such conditions for particular wind turbines. Class I, II, as capacitor banks, turbine soft starts, and variable and III specify the design wind speeds for a specific motor drives. In any case, the turbine selection turbine product. Manufacturers who are certifying process should consider the level of turbine and wind turbines must pick one of these classes. power quality control depending on the application and system requirements. Class I turbines are designed to operate in the Other Design Selection Criteria harshest climates, with strong annual average wind speeds and turbulent wind. Class II turbines are A multitude of other selection or design criteria designed for most typical sites and Class III turbines should also be considered when determining the are designed for low wind resource sites. Typically turbine model for a particular application. Turbine Class II and III turbines have a larger turbine rotor weight and installation height will be determined (longer blades) to capture more of the wind energy at by the equipment available to move and install the lower wind speeds. They may look more appealing turbine. Tower type (lattice or tubular, tilt-up or from an energy capture point of view, even at high crane-installed) will depend on the site conditions wind speed sites; but this should not encourage and manufacturer’s options. Some turbine people to install higher class turbines for lower class manufacturers have cold weather packages that sites. The class of wind turbine should be selected allow turbines to operate at lower temperatures and based on the conditions at a particular site. in icing conditions. Finally, there are applications where it makes sense to install an older turbine, The IEC has also developed standards for many which may have lower performance and limited other parameters, such as power performance, control options, but which can be maintained more noise, and electrical characteristics. Most large easily in rural areas rather than to purchase a modern wind turbines have been certified to IEC standards; turbine, which will have better specific performance however, this is not as common for medium wind and advanced control, but may be more difficult and turbines, due in large part to the cost. Turbine costly to service. Class and certification should be considered when selecting a turbine. 106
  • 107. Wind Power Technology OverviewWind-Diesel ApplicationsWind-diesel power systems can vary from simpledesigns, where wind turbines are connected directlyto the diesel grid with a minimum of additionalfeatures, to more complex systems. Two overlappingconcepts define the system design and requiredcomponents: the amount of energy that is expectedfrom the wind system (system penetration) and thedecision to use thermal loads and/or a storage deviceto remedy system energy fluctuations. Given today’stechnology, these issues are usually determined bythe system designers as a starting point for overallsystem design. These concepts are described in thefollowing section.When incorporating renewable-based technologiessuch as wind onto a diesel grid, the amount of energythat will be obtained from the wind resource relativeto the diesel generators must be determined, becausethis will dictate which components will be used. Athree level classification system has been developedthat defines different levels of penetration on thegrid. These classifications, defined as low, medium,and high penetration, separate systems along powerand system control needs (see the table on thefollowing page). Kotzebue Wind Farm 107
  • 108. Wind Power Technology OverviewRenewable Penetration Table 1: Penetration Class of Wind-Diesel Systems (Proposed by Steve Drouilhet) Penetration Penetration Operating Characteristics Instantaneous Average Class • Diesel runs full-time • Wind power reduces net load on diesel LOW < 50% < 20% • All wind energy goes to primary load • No supervisory control system • Diesel runs full-time • At high wind power levels, secondary loads are MEDIUM dispatched to insure sufficient diesel loading or wind 50% – 100% 20% – 50% generation is curtailed • Requires relatively simple control system • Diesels may be shut down during high wind availability • Auxiliary components are required to regulate voltage HIGH 100% – 400% 50% – 150% and frequency • Requires sophisticated control system 108
  • 109. Wind Power Technology Overview smaller unit will be turned on. This in turn will reduce plant diesel consumption and diesel engineWind-Disel Power System operation. It might also make the system vulnerableConfigurations to potential shortfalls, assuming the loss of one or more of the wind generators or diesel engines.Low-Penetration Systems In addition, with a large penetration of energy being produced by the wind turbines, it will becomeThe wind farm in Kotzebue is one of many low- harder for the operating diesel units to tightlypenetration systems that have been installed regulate system voltage and maintain an adequateworldwide. Low-penetration systems vary from power balance. There are options to insure thatsmall to relatively large isolated grids. Some large the high-power-quality requirements of the powergrids, such as those found in certain areas of the system are maintained, even with half of the energyUnited States and Europe, reach a wind power provided by wind. Some of these options includepenetration that would classify them in the same power reduction capabilities within the wind turbinecategory as low-penetration systems. In low- controller, the inclusion of a secondary load to insurepenetration systems, the wind turbines act as just that no more than a specified amount of energy willanother generation source, requiring no special be generated by the wind, installation of capacitorarrangements. banks to correct power the factor, or even the use of advanced power electronics to allow real-time power The control technology required at this level of specification. generation is trivial, especially given the control, flexibility, and speed of modern diesel and wind Spinning reserve on medium-penetration power systems. In many systems, no form of automated systems requires experience with regard to proper control is required; the wind turbines act under their power levels and system commitments, but is not existing controllers, and an operator monitors all considered technically complex. Such spinning system functions. Because the diesel engines are reserve issues should be handled on a case-by-case designed to allow for rapid fluctuations in power basis. They can be partially resolved through the requirements from the load, the addition of wind use of advanced diesel controls, the installation has very limited impact, if any, on the ability of the of a modern, fuel-injected diesel engine with fast diesel control to supply the remaining difference. start and low-loading capabilities, controlled load Issues of spinning reserve, a term used to represent shedding or reduction, power forecasting, andthe availability of instantaneous system capacity proper system oversight. Combined with the useto cover rapid changes in system load or energy of variable-speed or advanced-power conditioningproduction, are addressed by the allowable capacity available on many modern wind turbines, the controlof the diesel engines, which in many cases can run at requirements of medium-penetration systems are125% rated power for short periods of time with no relatively simple. The ability to provide high poweradverse impact. quality in medium-penetration power systems has been demonstrated for years in a number ofMedium-Penetration Systems critical locations. The most notable examples are the military diesel plants on San Clemente Island Systems with larger ratios of wind power fall into and Ascension Island, and the power systems inthis category. The concept is that by allowing power Kotzebue, Toksook Bay and Kasigluk, Alaska. Allpenetrations above 50%, any under-loaded diesel of these systems have experienced power penetrationgenerators in power plants consisting of multiple at or above the guidelines set for medium-generators will be shut off and, if necessary, a penetration systems. 109
  • 110. Wind Power Technology OverviewHigh-Penetration Systems In systems incorporating storage, the storage is Although demonstrated on a commercial basis, used to cover short-term fluctuations in power.high-penetration wind-diesel power systems During lulls in wind generation, the battery bankrequire a much higher level of system integration, or other storage device supplies any needed complexity, and advanced control. If the lulls are prolonged or the storage becomesThe principle of high-penetration systems is that discharged, a diesel generator is started and takesancillary equipment is installed in addition to a over supplying the load. Studies have indicated thatlarge amount of wind capacity (up to 300% of the most lulls in power from the wind are of limitedaverage power requirements), so that the diesel can duration, and using storage to cover these shortbe shut off completely when there is an abundance time periods can lead to significant reductions inof wind power production. Any instantaneous the consumption of fuel, generator operationalwind power production over the required electrical hours, and generator starts. The storage systemload, represented by an instantaneous penetration does not necessarily need to be able to carry the fullover 100%, is supplied to a variety of controllable community load, since in larger systems the storagesecondary loads. In these systems, synchronous is only used to smooth out lulls in wind energy orcondensers, load banks, dispatchable loads to buy enough time to start a standby generator.(including storage in the form of batteries or In these cases, the storage capacity should beflywheel systems), power converters, and advanced approximately the same size as the smallest dieselsystem controls are used to insure power quality and and have an accessible capacity up to 15 minutes.system integrity. Spinning reserve is created throughthe use of short-term storage or the maintenance In wind-diesel applications, the requirements forof a consistent oversupply of renewable energy. storage systems will depend on local wind resources,Although these systems have been demonstrated the costs of different components, capacity andcommercially, they are not yet considered a mature power response times, and the power systemtechnology and have not been demonstrated on performance required. Different storage options aresystems exceeding 200 kW average load. Wind- discussed in a separate section of this report, but carediesel systems that employ the high-penetration should be taken to insure that the storage technologysystem are operating in St. Paul and Wales. selected meets the specific needs of the particularBecause of the large overproduction of energy, high wind-diesel application.penetration wind-diesel systems are economicallyfeasible only if there is a use for the additional All high-penetration systems, with and withoutenergy generated by the wind turbines. In the case storage, have been installed in northern climatesof Alaska, this extra energy can be used to heat where the extra energy can be used for heatingcommunity buildings and homes (thermal energy), buildings or water, displacing other fuels. In thesedisplacing fuel oil. Another use could be to power systems, it may be wise to install uninterruptibleelectric or hybrid cars, ATV’s, and snow machines. power supplies (UPS) on critical loads. AlthoughStorage use in high penetration wind applications only a limited number of systems have been installed, the concept is economically attractiveUntil recently, it was assumed that high penetration and has the potential to drastically reduce fuelwind-diesel systems without storage were only consumption in remote communities in Alaska.theoretically possible. This is no longer the case.Commercially operating short-term storage and nostorage systems have been installed in recent years,demonstrating that both technology choices areviable. 110
  • 111. T resource data for a large number of Alaskan Project Information he development of a wind-diesel project can communities, but in most locations site specificbe a complex process, but with a wind resource wind data collection should take place for aindentified, the first step of the process is already period of one year before project financing iscompleted. obtained.Initial Site Selection Detailed Load Assessment The next step is to assess the land availability in The second key piece of data is the current conjunction with the wind resource map. The Alaska and expected load for the community. This Wind Map can be downloaded from the AEA web information can initially take the form of a site. This map covers most of the state and can be daily total generation log. As the assessment used as an initial guideline of where to look, but process becomes more detailed, it will become it should not be considered completely accurate. important to have time series data representing a Since the wind turbine needs to be connected to the full year, in a minimum of one hour increments. existing grid and have good road access, sites close This load data should take into account any to the road, river, and/or power lines are preferred. new plans for the community, such as new Once several potential sites have been identified, buildings or services, as well as standard load they should be surveyed by a wind energy or wind growth. Generally speaking, load data should be resources assessment specialist. The sites should collected at the power plant bus bar and should then be ranked based on a number of general criteria, be an average reading as compared to a series of such as: instantaneous measurements. • Likely wind resource (higher the better) • Limited environmental impact Development Considerations • Siting constraints including land availability, land cost, proximity to Other factors play into the decision to implement the airport, accessibility, and historical a wind-diesel power system. One important significance factor is the age and condition of the existing • Proximity to the power plant and electrical diesel plant. As introduced previously, wind distribution is a variable resource, and if harnessed it • Geotechnical considerations needs to be combined with other base loadAt more generation technologies. In most remote Alaskaninformation on siting can be found. communities this means diesel generators. Diesel generators are specifically designed toDetailed Resource Assessment provide power to a fluctuating load. They are a perfect match to the fluctuating power producedFollowing identification of the most likely sites by a wind turbine.for wind turbines, an anemometer tower should beinstalled. Typically, the anemometers are installed As discussed in the section on wind penetration,at the planned wind turbine installation height. For if the amount of wind relative to the load, andmost small to medium-sized communities a 30 m thus the number of operating diesel engines, is(~100 ft) anemometer tower should be sufficient. small, then older diesel technology will be ableLarger communities may want to install taller to handle the inherent variability in the load andtowers. If there are multiple high quality sites that wind generation. As wind penetration increases,are not in close proximity, multiple anemometer the controls of older diesels are not able to reacttowers may be needed. On their website, AEA has as quickly as needed. 111
  • 112. Additionally, the fuel performance of older turbines themselves are not more complex in regardsProject Information diesels drops off more rapidly at lower loads. to maintenance and operations compared to diesel The efficiency of these diesels suffers as more generators, the integration of wind turbines into a energy is produced by the wind turbines. This diesel system can add to the overall complexity of limits the amount of diesel fuel that can be offset the the entire system. A strategy for ensuring long- by the wind turbines. In contrast, modern fuel- term success must be developed beforehand. injected diesel engines with electronic controls System Analysis: While wind does not require fuel can maintain high efficiencies even at low load as a resource, the costs associated with installing a levels and should be employed for all higher wind generation system are significant. Determining wind penetration systems. It should be noted that if the price of harnessing free energy makes sense the majority of diesel engines deployed in Alaska is key to deciding how much wind, if any, to are fuel-injected with electronic controls that incorporate into a community’s power system. help to manage efficiency. Using the data collected it is possible to assess A second consideration is the overall age of the different power system configurations and different diesel powerhouse and associated switchgear scenarios for load, fuel prices, wind penetration, and and controls. As with any new energy project, equipment cost. A software tool like the HOMER integrating new equipment into an old power model produced by the National Renewable Energy house is problematic, especially when this Laboratory (NREL) ( is a good integration involves shutting down power to the tool to conduct these initial assessments. Another community. In low penetration applications, available screening tool is RETScreen, developed the additional control panels and integration are by the Department of Natural Resources Canada. probably not a significant concern, however, as Both tools have their individual qualities that have the level of desired wind penetration increases, been evaluated depending on the project needs in the these integration and switchgear issues become early phases of assessment. It should be noted that as more complicated. For this reason, if the different options are assessed, care must be given to intention is for wind energy to become a major insure that all key parameters and system efficiencies supplier of energy to the community, thought are properly considered. Organizations like AEA or must be given to the state of the diesel plant and private consultants can assist with this analysis. to a complete replacement of the whole power system, diesel engines and all. As the project develops, more detailed technical and economic assessments will be required. For A community should also carefully consider example, if initial analysis indicates that 500 kW the motivation behind moving to wind of wind energy is optimal, consideration of which generation. Usually, the cost of energy is a key turbines could be used would be based on the driver; however, this is only one of the issues available land area. This, in turn, will better define to be studied. Other important issues are the the cost of the required infrastructure and turbine environmental impact of energy generation, foundations, which can then be used to update the the price volatility of the ‘fuel’ used to create system cost calculations and performance modeling. that energy, the security of the resource supply, At this stage, more detailed performance modeling as well as the personal feelings of community using software such as the Hybrid2 model (http:// members. Ultimately, the purchase of new also power generation equipment is a long-term developed through NREL, should be considered. commitment and may not result in near-term reductions in the cost of energy. While wind 112
  • 113. Potential Reduction in Cost of EnergyEnvironmental Assessment M any factors play into the assessment of Project Information cost of energy from wind systems. The assumedAs with any development project in a community, cost of diesel fuel and the potential level of windenvironmental impact is expected and must be penetration are key parameters that must beassessed. The installation of a wind turbine may considered. The higher the penetration, the moreimpact birds, local wildlife and, fauna, directly or the potential fuel savings, but it is not until dieselindirectly. These impacts can be clear and easily engines are shut off, or until a shift to smallerdocumented and mitigated; however, some impacts and/or more efficient diesels, is made, will largeare more difficult to quantify. fuel reductions be possible. Nonetheless, in operating low to medium penetration systems inEnvironmental impacts will be site specific, and a Alaska, fuel savings as high as 25% have beensite environmental survey should be conducted at recorded, and higher fuel savings are technicallyany location considering wind power generation. feasible. The potential of these fuel reductionsDepending on the source of funds, different levels resulting in a lower delivered cost of energy toof environmental impact study are required. The the consumer will depend greatly on the cost oftotal environmental impacts of any project should the diesel fuel, the capital costs of the project,be understood in relation to those of other energy and more specifically on how much of that costoptions. Results of any environmental survey should must be borne by the discussed openly so that all options to minimizethese impacts are considered. 113
  • 114. Manufacturer OptionsT he following list includes turbine manufacturers who have equipment installed or being considered forinstallation in Alaska. Many other manufacturers have turbines on the market. It may be appropriate to look atthose products if they have a proven track record in similar operating conditions. Manufacturer Device Website Size Notes Turbine max Entegrity wind E15/50 50 kW power is closer to systems 65 kW Northern Power Northwind 100 100 kW Systems Remanufactured Various Vestas – V27 Various 225 kW turbine 65/75 Remanufactured Various Vestas – V15/17 Various kW turbine 1500 General Electr ic GE 1.5s businesses/ge_wind_energy/en/ index.htm kW Remanufactured Various WindMatic Various 65 kW turbineTurbine availability is also an issue, given the strong market for wind turbine technologies outside of Alaska. Atpresent only a small number of manufacturers are building medium-sized wind turbines in the of 50 kW to 1000kW range. This limits their availability. A supply of remanufactured wind turbines in this range is available,however, presenting another option. Remanufactured turbines, often units that were installed on American orEuropean wind farms in the mid to late 1980s and 1990s, are now being replaced with bigger turbines. In mostcases, these turbines are refurbished to the original manufacturers specifications.Unlike rebuilt turbines, remanufactured ones are usually outfitted with more modern, and higher performanceblades, breaking systems, and controllers, as well as with performance monitoring equipment. In consideringremanufactured wind turbines, care should be taken to insure that a specific remanufacturer has a strong trackrecord and can provide ongoing and long-term service and/or support. Most high quality remanufacturedturbines come with a limited warranty. System developers should not purchase used wind turbines and conductthe rebuild or remanufacture process themselves. 114
  • 115. Current Activity in AlaskaT he following describes the current use of mediumto large scale wind development in Alaska. Existing systems: Chevak Delta Junction Hooper Bay Kasigluk Kotzebue Nome Saint Paul Island Savoonga Selawik Toksook Bay WalesSeveral additional large wind projects, such as the FireIsland project along the Railbelt, are in developmentbut not yet under construction.The Alaska Center for Energy and Power (ACEP)at the University of Alaska is also in the process ofdeveloping a Wind-Diesel Applications Center. ThisCenter would represent a partnership between ACEP,AEA, several other state organizations involved inwind-diesel technologies, and NREL. The Center’smission would be to advance technology in windenergy and wind-diesel integration for the benefit ofAlaskans. 115
  • 116. Case Study #1: Saint Paul AlaskaI n 1999 a high-penetration, no-storage, wind-diesel power system was installed by TDX Power When wind power is insufficient to meet the load, the engines are engaged to provide continuousand Northern Power Systems to run an industrial electric supply as well as energy to the hot waterfacility and airport complex on the island of St. Paul system as needed. The total 500 kW wind-in the Bering Sea. The project was largely privately diesel cogeneration system cost approximatelyfunded and initially included a 225 kW Vestas V27 $1.2 million. According to TDX, the system haswind turbine. This project was later expanded and eliminated $200,000 per year in utility electricnow includes three V27 turbines, two 150 kW Volvo charges and $50,000 per year in diesel heating fuel.diesel engine generators, a synchronous condenser, a27,000 liter insulated hot water tank, approximately The operating wind turbines have had a capacity305 m (1,000 feet) of hot water piping, and a factor of almost 32% and good turbine availabilitymicroprocessor-based control system capable of following an initial problem with the originalproviding fully automatic plant operation. turbines’ generator. The average penetration for this system has been almost 55%, with significant timesThe electrical load for this industrial facility when the system operates with both of its dieselaverages about 70 kW, but the system also supplies generators off. Since January of 2005, wind energythe primary space heating for the facility, using has saved over an estimated 150,000 gallons ofexcess power from the wind generators and thermal diesel fuel, about 50% of the expected consumptionenergy from the diesel plant. When the wind without wind energy.generation exceeds demand by a specific margin, theengines automatically shut off, and the wind turbinemeets the electrical demand with excess powerdiverted to the hot water tank. V27 Wind Turbines on St. Paul Island.116
  • 117. Case Study #2: Toksook BayT oksook Bay is a coastal community located onthe Etolin Strait, approximately 115 miles northwestof Bethel. This system was installed in the summerand fall of 2006 as part of a complete plant retrofitby the Alaska Village Electric Cooperative. Thetown has a population of approximately 600people, but it is interconnected through the land-based interties to the nearby towns of Tununakand Nightmute, bringing the total populationserved to over 1,160. The average load of all threecommunities is just under 370 kW. The powersystem includes three Northern Power SystemsNorthwind 100kW turbines, diesel engines, anda computer-controlled resistive heater supplyingcommunity heating loads.The array of wind turbines has had an average netcapacity factor of 26.0% from August 2007 to July2008 and good first year turbine availability of92.4%. The average penetration for this system hasbeen over 24.2%, with average monthly penetrationsover 30% during winter months, when strongerwinds prevail. In the year ending September 2008,almost 700 MWhrs of electricity were generated bywind, offsetting almost 46,000 gallons of fuel. Northwind 100 Turbines at Toksook Bay. 117
  • 118. ConclusionsWind Working GroupRecommendations T here is clear interest and motivation to add wind technologies to the options available for providing energy services to remote communities in Alaska.The wind working group discussed tasks of interest Although wind or any other renewable technologyfor wind development in rural as well as urban areas. is not going to replace diesel technology in the nearThe working group agreed that wind development term, it is a valid option and should be considered forchallenges exist and have to be addressed. Some of communities that have access to a reasonable windthe technical challenges have been outlined above. resource.Additional areas in need of further study wereidentified as follows: The development of a wind-diesel power system or the incorporation of wind technology into an existing • Identify different business structures that diesel power system is possible as can be seen by the facilitate and optimize wind projects in rural recent history of projects installed around the state. At and urban energy environments. present, there are quite a few working examples and a • Identify options and discuss the possibilities large reservoir of resident expertise that can be tapped and cost of using excess wind energy for to improve future installations. heating and transportation fuel displacement. • Identify the social impact of community wind Costs and benefits must be assessed on a project- development. by-project basis. The economic impacts must also • Create a database of locally available wind be weighed against other benefits of using wind turbine models and system components. technologies, such as reduced risk to fuel price • Identify and list research and development volatility, environmental impact, and energy security. needs. It must also be understood that although wind is a • Further study wind integration issues in larger commercial technology, its application in Alaska will grids, especially in conjunction with large continue to be challenging. hydro installations. • Identify the Railbelt wind development There are over 300 remote, diesel power stations potential in regard to viable project locations. in rural Alaskan communities, only 10 of these • Approach residential wind issues separately, incorporate wind. This offers a great deal more but they should be studied when a larger experience to be gained in Alaskan wind applications. impact on small community grids is apparent. Nonetheless, the track record of wind integration at all penetration levels indicates that this is clearly a technology that is applicable for many of Alaska’s rural communities, as well as for those along the Railbelt.118
  • 119. References Web based resources: Alaska Energy Authority, wind energy program: http://References for further information:, T. (2005). Wind Power in Power SystemsWest Sussex, England: John Wiley and Sons. Danish Wind Industry Association guided tour and information on wind energy and wind turbine siting: http://Baring-Gould, E.I.; Barley, C.D.; Drouilhet, S.; Flowers,; Jimenez T.; Lilienthal, P.; Weingart, J. (1997). DieselPlant Retrofitting Options to Enhance Decentralized HOMER power system optimization model ( Supply in Indonesia. Proceedings of the 1997 homer)AWEA Conference, Austin, TX. June 1997. Hybrid2 power system assessment model (http://www.Baring-Gould, E.I.; Flowers, L.; Lundsager, P.; Mott, L.;, M.; Zimmermann, J. (2003). World Status of Wind National Renewable Energy Laboratory, National WindDiesel Applications. Proceedings of the 2003 AWEA Technology Center: Wind PoweringConference, Austin, TX. America: wind.aspBurton, T.; Sharpe, D.; Jenkins, N.; Bossanyi, E.; WindEnergy Handbook, John Wiley & Sons Ltd. 2001Dabo, M.; Jensen, J.; Smith, J.; Regional Economic WindDevelopment in Rural Alaska – Part I Technical Potential,the Arctic Energy Summit, Anchorage, Alaska, October 1518, 2007.Drouilhet, S. (2001). Preparing an Existing Diesel PowerPlant for a Wind Hybrid Retrofit: Lessons Learned in theWales, Alaska, Wind-Diesel Hybrid Power Project. 13 pp.;NREL Report No. CP-500-30586.Gipe, P.; Wind Power, Revised Edition: RenewableEnergy for Home, Farm, and Business; Chelsea GreenPublishing; 2004Hunter, R.; Elliot, G. (Eds). (1994). Wind-Diesel Systems.Cambridge, UK: Cambridge University Press.Lundsager, P.; Madsen, B.T. (1995). Wind Diesel and StandAlone Wind Power Systems. Final Report May 1995, BTMConsult and Darup Associates ApS.Manwell, J.F.; McGowan,, J.G.; Rogers, A.L.; Wind EnergyExplained, by John Wiley & Sons Ltd. 2002.Shirazi, M.; Drouilhet, S.; Analysis of the PerformanceBenefits of Short-Term Energy Storage in Wind-DieselHybrid Power Systems. 13 pp.; NREL Report No. CP-44022108. (1997) 119
  • 120. Biomass Energy TechnologiesAEA Program Manager: Ron Brown (771-3064) TECHNOLOGY SNAPSHOT: BIOMASS Globally, biomass is the fourth largest energy resource after coal, oil, and natural gas. Uses: heating, cooking (biomass), transportation (biofuels), and electric power generation Installed Capacity (biopower). NREL estimates 278 quadrillion BTUs of (Worldwide) worldwide installed biomass capacity. EIA estimates >2.8 quadrillion BTUs of U.S. biomass energy consumption (2004) Biomass – (heat & cooking) widely used Installed Capacity Biopower - 0 kWe (currently no commercial installations) (Alaska) Biofuels – (biodiesel, ethanol) demo projects Potentially available to communities in all regions of Alaska with adjacent or transportable biomass resources. Resource Distribution Alaska has >10 times more unused biomass energy resource potential than needed to offset all its diesel fuel used for power production in rural Alaska. Number of communities 100+ SE Alaska and Interior impacted Biomass – commonly deployed (heat) Technology Readiness Biopower – Pre-commercial to early commercial. Biofuels – limited deployments (fish oil/biodiesel) With proper management, impact on local forest land and species is generally considered to be positive. 1.5 million Environmental Impact acres are lost annually to wildfire in Alaska, and thinning reduces fire risk. High confidence in cost savings and localization of benefits Economic Status for heat. O&M creates local jobs and savings. Bio-Power has high projected cost with limited potential at this time.120
  • 121. IntroductionB iomass energy, in the form of heat andpower, is created by the forested land, with an estimated 1.9 million cords (3.7 million tons) ofcombustion or gasification Transportation and Technical Challenges to annual growth. Onof carbon-based plant Biomass energy: average, over 1.5matter. Biomass energy million acres per yearis considered demand • Environmental concerns, especially those related of forested land areenergy, available as/when to air quality and the health impact of smoke from subject to wildfires andneeded. Woody biomass inefficient heating systems in small communities beetle-kill. Some of the must be addressed. Efficient stoves and boilersis the most commonly wood on these affected required by federal regulations are more expensiveused form of biomass than many people can afford. Less efficient devices lands is salvageable asfuel. It is used directly are common in remote communities. As opposed biomass fuel. Alaskaas firewood, or it can be to individual user systems, community-scale and grows substantially moreprocessed into woodchips industrial-scale systems for heat or power are easier biomass than it uses foror densified into pellets or to regulate and present less of a threat to health. energy.bricks. Woody biomass • Biomass is a high-volume fuel requiring handlingis inherently a distributed Despite the obvious equipment and protected storage facilities.resource: finding, opportunities, thereacquisition and gathering, • Many Alaskan rural communities are in severe are also significantstacking, and storage are physical environments and have limited human transportation andthe initial challenges with resources for technical operations and maintenance technical challengesbiomass fuel. of complex or hazardous equipment. related to the deployment of biomass energy devicesProcessing biomass ranges • Heat and power are essential needs, especially in Alaska’s urban or ruralfrom the simple (bucking in winter. Equipment breakdowns and technical challenges are magnified in these communities, so communities. Somelogs into suitable lengths), diesel backup is necessary. challenges are commonto chipping or chunking to installations in any(chippers are commonly • Sustainability of forest resources is a sensitive and location, while others areavailable machinery), essential issue involving the cooperation of many more specific to Alaskanto the more complex stakeholders. off-road communities (see(densification that involves box).chipping, drying, and In addition to providing savings over diesel, harvest andcompressing biomass into utilization of biomass can benefit communities in Larger scale wood-firedpellets, bricks, or logs). As other ways: power systems are quitethe levels of complexity common throughout • Properly designed forest land use can lessen risks ofrise, the benefits of proper wildfire and improve wildlife habitat. Europe, the United States,handling and storage of • Higher quality logs can be used for house logs or and Canada, especiallythe fuel become more milled into lumber; lower quality material can be at forest-productspronounced. used for energy. manufacturing facilities, • Wood harvest and marketing for energy provides jobs places that have the basicHydronic (hot water) and keeps money in the community.furnaces and boilers ingredients for economiccombust stick-wood to heat and technical feasibility:water or other fluid, which can then be transported large demand for power,and used nearby as district heating for buildings, for heat required for lumber drying or other processes,example, or process heat for manufacturing. and plentiful wood waste that needs to be disposed or used. Conventional biomass-fired plants totaling overAlaska has nearly 12 million acres of available 60 MW in capacity operated at pulp and sawmills in 121
  • 122. Greenhouse at Dry Creek heated with wood. The hydronic fin tube and piping run under- neath the plant platforms.122
  • 123. Biomass Technology OverviewKetchikan, Sitka, Metlakatla, Haines, and Klawockinto the 1990s. Retrofitting and re-permiting existing O ther systems such as fuel cells are not included in this discussion, because they are still in early stages ofcoal power plants to co-fire wood and other biomass development and not close to commercialization.represents another common bioenergy alternative inthe Lower 48. In Alaska, Eielson Air Force Base’s Wood is composed of several chemical componentscoal power plant co-fired densified paper separated that react differently when burned. In a wood firefrom the Fairbanks borough waste stream until 2007. approximately 80% of the solid wood or volatile matter converts to gas before it burns. This gasStand-alone, small biopower or combined heat and made up of carbon monoxide and hydrogen ispower (CHP) technology is generally considered pre- commonly called producer gas or wood gas. If itcommercial in the U.S. While European and Asian is burned directly in a stove or furnace, its heat isfirms have commercial experience and demonstration transferred directly to the living space or to waterprojects abound in the Lower 48, most systems are where its heat can be distributed to buildings bycomplex and have significant technical and economic means of hot water or steam.challenges. Producer gas can beCordwood is commonly used Biomass technologies appropriate for Alaska fall into separated from the solidsfor heating throughout Alaska. in three categories: and burned as a fuel gas.Cordwood-fueled community- 1. Domestic heating appliances like stoves and Producer gas must be usedscale heating systems have small boilers; close to the source becausebeen demonstrated in several 2. Community-scale heat and/or power systems of its low heating value and based on boilers or enginescommunities in Alaska, in low energy density. This 3. Larger-scale power generators based onDot Lake and Tanana, for gas has only 15% of the steam or wood gas.example. A woodchip-fired heating value of natural gasschool and community pool or propane, but it can beheating system was recently installed in Craig, and burned directly in boilers, as a fuel gas in engines,that heating system has been considered for other or externally to heat other heat transfer devices suchcommunities as well. as Organic Rankine Cycle (ORC) fluids or Stirling engines attached to generators. These devices areSmall, wood-fueled Combined Head and Power currently being developed for generating power at a(CHP) systems are planned by Chena (400 kW) and small scale suitable for applications in the Alaska Cold Climate Housing Research Center(CCHRC) in Fairbanks (25 kW). As the gas and volatile components of producer gas cool, several components condense to form tars and oils. These oils can be converted to pyrolysis oil, also known as bio-oil, which can be used as a transportable liquid fuel. Technologies for making bio-oil are still in development. About 20% of wood is in the form of fixed carbon. Fixed carbon converts to charcoal (char) when heated. The charcoal does not convert to gas, but burns in direct contact with air. Charcoal burns at much higher temperatures than wood gas, so it is preferred as a cooking fuel around the world. 123
  • 124. System and fuel typesWith devices that make gas or oil, the char isrecovered or burned to provide heat to make W ood biomass energy devices require a fuel handling system, a combustion vessel (furnace,producer gas. In a stove or furnace the charcoal boiler, or gasifier), ash removal, and generalburns once the gases have evolved and air is maintenance. In the simplest case of manual loadingavailable for direct combustion. the equipment is needed to cut, gather, and store the wood; manpower is needed to load the unit regularly.Domestic heating devices and small boilerssometimes use gasification principles to burn the In chip-fed systems, a chipper is added to thewood efficiently, but in these appliances all the wood equipment list, a loader to handle woodchips,is converted to heat. Many older-style outdoor wood and a bin and feeder (moving floor and/or auger).boilers (OWBs) are inefficient burners. They cause Woodchips are more vulnerable to moisture thansignificant air pollution from incomplete combustion logs and require protection from weather. Inand convert only 35% of the energy available in the many systems the woodchips require screeningwood to heat energy in water. Newer, more efficient for oversized or undersized material, and they areboilers burn with a clean stack and convert more subject to bridging, a resistance to flowing.than 70% of the energy in the wood to heat in theform of hot water or steam. Pellet-fed systems require more ‘upstream’ processing to deliver pellets to the system, but lessCommunity-scale heat and power systems are complex fuel handling; pellets can flow. Along withusually based on boilers that convert the heat to higher delivered cost, all forms of densified biomasshot water or steam for distribution. Larger boilers have more predictable handling and combustioncan produce steam at a high enough temperature characteristics than stick-wood or woodchips.and pressure to generate power in a steam engineor turbine. Steam engines and small turbines Hydronic (hot water) systems add the costs of waterare usually very inefficient, so other fluids and or other fluid tanks, temperature and pressure controlgenerating devices such as ORC and Stirling engines systems, insulation, and piping to end-users.are under development. In parts of Europe that haveextensive district (community) heating systems, CHP gasification systems require a more complexsome plants are being modified to generate power temperature, pressure, and electrical control system;using gasifiers with engines or furnaces with ORC wood gas cleanup equipment; a generator, turbine orand Stirling engines. fuel cell; fail-safe switching; and a connection to the electrical grid and/or battery bank.Large-scale power generators are usually basedon wood boilers that can operate at sufficient ORC systems require heat and cooling to createsteam temperature and pressure to make electricity a temperature differential for electric generation.efficiently. A small power boiler, 10 MW, would be Biomass-fired ORC systems are in development inenough to power a sizeable town. These systems are the United States after the successful demonstrationnot suitable for small villages with moderate heat of a geothermal-fired system at Chena Hot Springs.and power loads and limited technical expertise. For some time these systems have been in operation in Europe. 124
  • 125. I Project InformationThe high capital cost and projected operation and n order to put together a biomass energymaintenance (O&M) costs of CHP systems will project, the initial information required is heatlikely be feasible only in larger communities with and electrical consumption estimations and fuelhigh power demand, high diesel prices, and a way resource availability. Forest biomass resourceto use the substantial amount of heat from the information has been recently gathered for manysystem. As the technologies are refined and costs areas of rural Alaska.are reduced, smaller-scale applications may becomefeasible. Mapping Forest Biomass Resources:The sustainability of biomass supplies requires Further successful deployment of biomassplanning and coordination, and it will vary widely energy systems requires secure and sustainableby area. Regional facilities that gather and process wood supplies. Many rural areas do notbiomass could become a feasible option for upriver, currently have an existing infrastructure forforested communities to supply fuel to downriver harvesting, processing, and delivering wood.communities. Mobile equipment could be shared Communities that could benefit from a wood-by several villages in a region on a rotational basis. fired CHP system must first complete woodRoad system communities could also benefit from supply surveys and organize fuel acquisitionmedium-scale regional facilities. and handling plans. It is important that wood harvest operations be planned in the context of overall land use objectives to minimize conflicts with other users. Environmental Assessment: Biomass heating or power systems must comply with air quality and waste disposal regulations. Design considerations include the height of boiler stacks and protection of water discharge. Solid residues from wood burning are mostly non-toxic ash and useful as a soil amendment. 125
  • 126. Potential reduction in cost of energy A bundant wood fuel at relatively low cost is the primary source of savings in biomass energy. Biomass heating systems are predicted to offset heating costs in many communities where they are not already in use. Biomass CHP systems could Savings are highest when available wood fuel is a result in long-term reductions in electrical generation byproduct of wood processing (lumber mill, wood costs in communities with appropriate biomass product manufacturing) as in the case of wood chip resources, heat and power demand, and escalating boilers. The cost of wood increases and savings diesel fuel costs. decrease where wood fuel is from round wood and forest residue. A 2007 study suggests that at $2.25-3.00/gal diesel fuel prices and current technology costs, only larger Installation and operation costs of biomass energy communities are likely candidates for CHP systems. systems may be higher than diesel or natural gas That list includes Aniak, Dillingham, Fort Yukon, systems. Operation and maintenance (O&M), Galena, Hoonah, Tok, and Yakutat. If fossil fuel costs insurance, permitting, design, and environmental escalate and CHP technology evolves, more small monitoring costs may be substantial for the earliest communities may also be come viable candidates. biomass installations. The application of lessons The same study also concludes that woody biomass learned will reduce costs on subsequent installations. resources are adequate for fuel requirements in most of the forested communities being considered for biomass systems. 126
  • 127. Manufacturer OptionsT here are several options for heating, fewer for power generation. Listed below are some examples of highefficiency boilers and some new designs for small-scale power generation being used or considered for use inAlaska.The following list includes developers who, at a minimum, have built a prototype device. Level of Manufacturer Device Website Location Development High efficiency Dot Lake, Tanana, Commercial 25 years Hydronic Ionia, Homer (private High fuel efficiency Garn Wood Fired individual) (75.4%), low Heaters emissions 130 installed Chiptec Gasifier-boiler Craig 1 - 30 MMBtu Decton Chip and Industrial and Dry Creek sawdust boiler community use Chip and Kenney Lake Industrial and Decton sawdust boiler Regal Saw Mill community use Crorey Prototype in www.croreyrenewable. Renewable 25 kW gasifier CCHRC Fairbanks development, not yet com Resources delivered Commercial 200 kW demonstration with UTC Power Purecycle Chena Hot Springs geothermal, biomass ORC project planned for 2009 Danish 35 kW Denmark Demo Stirling Stirling AgriPower 100+kW New York Demo 127
  • 128. Case Study #1: Tanana, Heating SystemI n November 2007 the community of Tanana installed two cordwood boilers to heat a washeteria with a systemsimilar to one operating in Dot Lake since the late 1990s. Cordwood is burned to heat a large reservoir of water.Wood is burned with 75.4% efficiency at a high temperature for about two hours, twice a day. The water storesthe heat and circulates it to the washeteria and other buildings as needed.The Tanana project represents an efficient method of burning wood. Other boiler systems are now beingdeveloped to operate at high efficiency. Compared to the low-efficiency OWBs (Outdoor Wood Boilers), theseboilers use half the wood fuel. Many communities could benefit from these systems. They are heat-only systemsand have not yet been integrated into CHP systems capable of generating power.System: Two (2) 1850 gallon hot water boilers, 425,000 Btu/hr eachManufacturer: Garn, MinnesotaFuel: cordwood substitutes for 9,000 gallons diesel per year (250 gals/day)Wood fuel (spruce) at $225/cord is equivalent to diesel at $2/gallonSchedule: installed November 2007Budget: $170,000 including photovoltaic solar panels on roof of WasheteriaAssuming 72 cords/yr are necessary to displace 9,000 gal/yr of diesel, increased labor costs of $1,100/yr overthe existing oil system, $850/yr for power and other wood system O&M, $225/cord of spruce, and $5.00/gal forheating fuel, annual savings are approximately $26,700/yr. Therefore the simple payback on the initial systemcost is $170,000/$26,700; approximately 6.5 years. Wood for winter heating is piled up along the Yukon River at Ruby. 128
  • 129. Case Study #2: City of Craig, Heating SystemI n 2004 the city of Craig began investigating ways to reduce the cost of heating their community swimmingpool and pool-house, as well as their elementary school and middle school. The three buildings are adjacent toone another on city property in the middle of town. One study suggested converting the propane-heated poolto oil (14,000 gallons/year). Further study showed that a woodchip-burning boiler could substitute for both thepropane used for the pool and the oil in the schools (~ 24,000 gallons of oil per year). Chipped wood wouldcome from a local sawmill. The project looked feasible with oil at $2.50/gallon, so a detailed engineeringdesign was developed and the boiler was finally commissioned in the spring of 2008. It was turned off in Mayand restarted in September.Wet chips are delivered to the 24-ton storage bin (a 10-day supply at 2.2 tons per day). Hot water fromthe boiler heats air used to dry the chips to the desired moisture content. The wood is burned in a stagedcombustion system. It is first gasified, and the gas is burned in the boiler. Hot water from the boiler is pumpedon demand to heat exchangers at the pool and schools. If the wood boiler failed, the existing propane and oilboilers would continue to supply heat to the facilities. For three months the system required about 8 - 10 hoursper week of maintenance time, which included a weekly cleaning. The boiler has excess capacity and maysupply additional buildings in the future. By January 2009, the City of Craig will release a report describing the development of the project. It will probably take another two years to obtain more detailed operating characteristics and costs for the project. Experience in similar Lower 48 installations has shown that it takes time to adapt to the inherent variability of local fuel and heating loads. For example, in 2009 the City will try substituting less expensive hog fuel, a mixture of sawdust and bark, for the more uniformly sized and drier chips currently supplied by the sawmill. Assumptions and preliminary economics: • 85% displacement of 22,300 gal/yr of #2 heating oil and 39,000 gal/yr of propane used by the pool and school buildings • $4.10/gal for heating oil and $2.50/gal propane • O&M costs of approximately $24,000/yr (1/3rd labor and 2/3rd power and consumables) • 753 tons/yr of 50% moisture content chips at $20/ton • 65% efficiency for wood combustion versus • 70% efficiency of the previous system Lessons learned at this installation can be used to save time and reduce cost in other communities. Annual savings will be approximately $122,000 per year. Simple payback on the initial system cost System: 4MMBtu/hr gasifier, hot water boiler is $1,510,000/$122,000, approximately 12.4 years. Manufacturers: Chiptec (Vermont), Design Engineer: R&M (Ketchikan), Given the spare capacity, system economics will CTA (Missoula). improve if the project serves additional facilities. Fuel: woodchips from Viking Sawmill, Klawock, Given an estimated useful project life displace equivalent of 24,000 gal diesel/year. Schedule: Commissioned April 2008. of 20 years, the economics of the current project are Installed cost: $1.51 million acceptable under the above assumptions. 129
  • 130. Case Study #3: Village Power, CCHRC 25kW Gasifier Demo T he Cold Climate Housing Research Center (CCHRC) is engaged in a biomass gasifier testing/ facilitate the subsequent placing of a unit in another remote location for further testing and demonstration. demonstration project with a proposed 25 kW gasifier The first phase of this project is funded by the that is being manufactured by Crorey Mechanical in Fairbanks North Star Borough and the State of Alaska Oregon.  It is designed to run on wood chips.  The DCED at a level of $300,000. Additional funding will target delivery date was set for October 2008, but be required for development of feedstock conveying the manufacturer is behind schedule.  Now it might and drying equipment. In addition to this project, be ready for shipment after January 1, 2009.  The CCHRC continues to search for a residential-scale manufacturer has previously successfully field tested biomass CHP system for testing and demonstration at units using wood pellets and coffee waste as fuel, but their Fairbanks facility. their product has not yet been commercially installed. The intention is to run the gasifier in tandem witha diesel genset displacing a portion of the diesel Proposed system: 25 kWe gasifierfuel.  Success with this first test could lead to pairing Manufacturer: Crorey Mechanical (Oregon)the gasifier with a spark ignition genset and eventually Fuel: wood chipsa microturbine to demonstrate other available options Schedule: tentative delivery date of January 2009potentially appropriate for specific applications. Budget: Phase 1: gasifier and testing ($300,000)The gasifier will be operated and assessed over a Source: Fairbanks North Star Boroughtesting period and, if successful, CCHRC will then Phase 2: fuel handling ($$ unknown at this time)develop a feedstock conveying and drying system Source: Unknownappropriate for the Alaskan environment. This will 130
  • 131. Case Study #4: Community CHP Case Study #4: Community CHP –Fairbanks Fairbanks 400 kWe ORC The shredder reduces the biomass to a uniform sizeU nited Technology Corporation (UTC) andChena Power have proposed a biomass/ORC power- that is easily combustible and delivers it to the live floor. The live floor stores the shredded biomass until it is required by the boiler, at which time the rakegenerating demonstration project for a site near the and auger system in the live floor feeds biomass intocommunity of North P ole. Wood waste and waste the boiler. The boiler generates heat, which heatspaper will be separated from the waste stream and thermal oil, which in turn heats refrigerant in the UTCcombusted in a Wellons thermal oil heater to deliver PureCycle 200 power plant. The refrigerant expandsheat to a UTC PureCycle 200 power plant module. and turns a turbine that generates electricity. On theThe boiler is rated at 2.5 MW thermal capacity with other side of the turbine, the expanded refrigerant isan efficiency of 85%. UTC is currently redesigning air cooled. It condenses back into a liquid, completingthe PureCycle to operate at 20% efficiency converting the cycle.heat to electricity, which means that the proposedsystem could supply up to 450 kWe (net 400 kWe). Proposed system: 400 kWThe system will have excess thermal capacity that can Manufacturer: Wellons, Inc. (Oregon), UTCbe used for space heating. Power (Connecticut) Fuel: woodchips, paper, cardboardFour main components comrise the UTC/Chena Power Schedule: Projected 2009-2010project: Budget: $5 million • Shred-Tech STQ 100 Shredder and Future plans: if a successful demonstration, Conveyor System this technology could be used at other sites • Wellons Live Floor Feed System Based on: 400 kW ORC (UTC Power) • Wellons 2.5 MW Boiler generator currently in use at Chena Hot • Two UTC PureCycle 200 Power Plants Springs 131
  • 132. Wood Energy Working Group RecommendationsT he Working Group agreed that the need forsmall to medium-sized biomass projects for space funding capabilities. The consensus is that wood pellets are desirable because they burn cleanly,heat is critical to help combat the high cost of and that the appliances and boilers that use themenergy in rural Alaskan communities. They also are a proven commodity. Wood pellets are easy torecommended ongoing research to find suitable transport and store, and they are the closest fuel tobiomass technologies for generating power while liquid or natural gas that can be easily manufacturedsimultaneously providing space heating in smaller in Alaska.communities. The group also recommends wide promotionThe Working Group is aware of the impending of EPA-certified wood stoves to insure efficientAlaska Energy Authority RFP process for Renewable wood resource utilization. They also recommendEnergy Projects and is encouraging communities promoting only High Efficiency, Low Emissionthat have biomass resources readily available to (HELE) Hydronic Wood-Fired Heaters for largerapply. The consensus is that most applications will projects that meet minimum standards for overallbe submitted for small to medium space heating efficiency (combustion efficiency x heat transferprojects and district heat loops. efficiency) and EPA particulate standards for emissions.The group is interested in seeing wood pelletmanufacturing take place in Alaska. Severalfirms from Outside with years of pellet productionexperience are looking at developing projects inAlaska, partnering with entities with resources and Left: High Efficient Low Emission GARN hydronic wood-fired heater being tested at Tanana. Twin units will heat the 5,000 sq. ft. washeteria and provide domestic hot water for showers and washing machines. They will also add heat to the community water loop to help deter freeze-ups during winter months.132
  • 133. ConclusionsB iomass CHP systems are in the early stages ofdevelopment and demonstration. They require more Referencesdevelopment to perform reliably. Existing systems Renewable Power in Rural Alaska: Improved Opportunitiesdo not show any savings over systems powered by for Economic Deployment, Peter Crimp, Steve Colt, Markoil and gas at today’s oil and gas prices. Foster, Institute of the North, Anchorage, 2007, The Arctic Energy Summit Technology Conference, Anchorage,Facilities to manufacture densified biomass fuel Alaska, October 15-18, 2007. https://www.confmanager. com/communities/c680/files/hidden/Abstracts/(pellets, bricks, and logs) will develop in tandem UploadedAbstracts/Renewable_Power_in_Rural_Alaska-with deployment of systems for delivery and use of Crimp.docdensified fuel. Feasibility Assessment for Wood Heating, FinalBiomass for space heating to help reduce trhe high Report, August 2006 prepared by T. R. Miles Technicalcost of energy in rural Alaska has a high probability Consultants, Inc. for Alaska Wood Energy Developmentof success. The following are requirements for Task Group (AWEDTG), Juneau Economic Developmentsuccessful projects: Council/Wood Products Development Service, Sitka, AK• Projects must be economically viable WoodEnergyFeasibility.pdf• Must be technologically feasible Dave Misiuk, Cold Climate Housing Research Center,• Must be supported and endorsed by owner/ Fairbanks operators, the local community, fuel suppliers, and state and local governing bodies Craig, Alaska Wood Energy Project Update, Jon Boling,• Must have a local champion City of Craig, Alaska Wood Energy Conference, Fairbanks,• Must have long term reliable and sustainable fuel November 14-15, 2007 sources natural/forestry/AWEC/Day1/Field%20proven%20 wood%20energy%20systems/Jon_Bolling.pdf, http://www.Several biomass heating systems are currently in as successful examples. Draft Proposal, Chena Wood Energy Project, May 7, 2007 Building a Better Wood Stove in Tanana, Milkowski, Fairbanks Daily News-Miner, November14, 2007 http:// 133
  • 134. 134
  • 135. Geothermal Energy TechnologiesAEA Program Manager: David Lockard (771-3062) Hothouse tomatoes are grown at Chena Hot Springs year round with the geothermal project. TECHNOLOGY SNAPSHOT: GEOTHERMALInstalled Capacity (Worldwide) approximately 10,000 MWInstalled Capacity (Alaska) 680 kW installed Dispersed resources exist across southeast Alaska,Resource Distribution the Interior, and the Aleutians.Number of communities impacted LimitedTechnology Readiness Commercial Minimal, small plant footprints, little or no CO2Environmental Impact emissions, reduced surface flow of thermal springs Payback of 5 to 8 years expected for the Chena Hot Springs Project, project economics vary widelyEconomic Status depending upon size of project and sales price of electricity Right: Alaska’s abundant geothermal sources provide hot water at close proximity. 135
  • 136. Introduction G eothermal is a general term describing the heat generated and contained within the earth. Over 90% In fact at the Chena Hot Springs Resort, 500 gallons per minute of 163oF water is making around 200 of the total volume of the earth has a temperature kW of electricity, the amount of electricity used by a exceeding 1000oF, and only a small amount of village of about 300 residents. The combination of this heat gets close enough to the earth’s surface high flow rates of hot water and low surface water to be utilized by conventional technology and be temperatures in use allow Chena to be the lowest- considered an energy resource. When it does, the temperature geothermal power plant in the world. elevated heat manifests itself in uncommon geologic occurrences like lava flows and volcanic eruptions, For geothermal energy to be technically and steam vents or geysers, hot springs, or elevated economically feasible, a number of conditions must geothermal gradients creating hot rock. In normal be met. These conditions include: (1) an anomalous geologic situations, the majority of the heat slowly thermal gradient or accessible heat in a near-surface dissipates into the atmosphere by unseen heat region, (2) sufficient porosity and permeability transfer processes known as conduction, convection, within the section of ‘hot rock’ so that fluids can and radiation. move freely and transfer heat, and (3) some form of conduit that allows a hot fluid to flow to the At the surface of the earth, heat can also be gained surface in sufficient quantities. There the energy from the sun during daylight hours. The sun, can be converted into a usable form. Clearly, the especially during the summer months, can heat to higher the near-surface temperature and the higher depths of 100 feet. When ground source heat pumps the permeability and flow rates, the more feasible are used for heating buildings, the energy may come the resource becomes. Unfortunately, out of the from either solar or geothermal sources. Below a thousands of natural springs in Alaska, only a few depth of several tens of feet, any heat recovered have sufficient temperature and flow rates necessary from the earth will usually be geothermal in origin. to produce electricity. In some limited cases where Geothermal heat comes from two main sources: high near-surface heat exists, these fluid flow and the original heat of the earth generated at its heat transfer systems can be enhanced by drilling formation about 4.5 billion years ago and the and fracture technology if geologic conditions are more recent decay of the radioactive isotopes of right (see EGS below). potassium, uranium, and thorium. Globally, geothermal resources have been found Geothermal resources are found on all continents in four generalized geological environments: areas and have been used for a wide variety of purposes, of active volcanism and igneous activity; areas of ranging from balneology (the science of soaking thinned continental or oceanic crust; large crustal in hot springs or hot mud baths) to industrial or scale faulting; and some sedimentary basins. Power direct use processes such as space heating, from plant outputs from these geothermal fields vary from process heat for drying things like fish or lumber about 1 MW to over 700 MW. The most prolific and to electrical power generation. Industrial uses widespread geothermal resources are contained in require temperatures ranging from 150oF to around areas of dramatically thinned crust and associated 300oF. For large-scale electrical power generation, igneous activity, such as Iceland and to a lesser (measured in megawatts or millions of watts) degree Nevada and southern California. temperatures in the neighbourhood of 300oF to 650oF are needed. In Alaska with its cold climate and abundant cold water resources it is possible to use much lower geothermal temperatures for small-scale electrical power generation. 136
  • 137. Technology Overview (Steam & OCR)W ith the possible exception of weaklydeveloped rifting on the Seward Peninsula, this There are numerous sedimentary basins in Alaska, the most famous of which underlies the Northgeologic environment does not exist in Alaska. Slope and hosts the Prudhoe Bay oilfield. ExcellentProducing tens of megawatts, moderate-sized porosity and permeability can be maintained ingeothermal resources are associated with linear sedimentary rocks at depth, and if the geothermalbelts of volcanoes which form when one plate is gradient is sufficient, hot fluid can be producedsubducted beneath another. Active Alaska volcanoes from these formations. For example, the reservoirlike Mt. Spurr west of Anchorage and others along temperature at Prudhoe Bay at 7500 to 8000 footthe Alaska Peninsula and Aleutian Islands are depth is approximately 180oF to 200oF. Dependingsubduction-related. Some of these volcanoes host on the geothermal gradient of the basin and the relicwhat are apparently the hottest geothermal resources permeability at depth, production of this hot waterin Alaska. may become a viable small-scale energy source for oilfield operations, or even for communities inOther, smaller geothermal systems are closely the immediate area. The high cost of drilling andassociated with crustal scale strike-slip fault systems permeability enhancement, along with relativelyin southeastern Alaska and through the Interior. A low geothermal temperatures, makes these resourcescomplete list of these known geothermal resources difficult to economically develop on a stand-alonecan be found at in basis.publication MP-8.Hot springs located along large faults in the earthare relatively widespread. These faults can extendwell into the crust of the earth. If the fracturesremain open under the great amount of pressure,these faults might allow water to percolate morethan 2-3 miles deep. If this happens, the water willbecome hot by virtue of the significant depth reached(a typical geothermal gradient has a temperature ofabout 270°F at 3 miles depth). If the fault maintainsporosity and permeability, this heated water can beforced to the surface (or near surface) and become ageothermal spring. 137
  • 138. Technology Overview (Steam & OCR) I n making electricity from geothermal steam or hot water, two basic types of equipment convert the Enhanced Geothermal Systems (EGS) heat energy into electrical energy. If the geothermal fluid temperatures are greater than about 350oF, a M ost of the earth is not near volcanoes or major active faults so it lacks open space or fractures conventional low-pressure steam turbine is utilized. As the steam passes through a series of blades that can heat the fluids necessary for a shallow known as a rotor, the pressure is reduced. The geothermal system. The geothermal industry has steam expands, thus spinning the rotor. The rotor is long known that developable heat exists within attached by a straight shaft to a generator that spins drillable depths in most areas of the globe, yet a and makes electrical power. In a few rare places in technically economically feasible way to transfer the world, geothermal production wells flow steam that heat to the surface in economic quantities has with no water. The steam is transported directly been elusive. If this methodology can be developed, from the well to the turbine. In most cases a mixture a tremendous energy resource can be tapped. One of steam and hot water is produced by the well, interesting aspect of this research effort is the use of and the water must be removed with a separator so techniques developed by the oil and gas industry to that only pure dry steam enters the turbine. The fracture rocks far below the surface, Huge volumes geothermal liquid and the condensed steam are sent of fluid are pumped at high pressure into the deep to an injection well, where they are returned to the strata. The theory is that once the rocks are broken reservoir to be utilized again and again. Essentially, and permeability is established, it is possible to a geothermal power plant ‘mines’ heat from a pump cold water down one hole into hot rocks and geothermal reservoir. recover it from a second hole located thousands of feet away. If all goes according to plan, the water If the geothermal fluid temperatures are less than will mine heat from the fracture surfaces between the about 350oF, a different type of turbine is needed. two holes. It will become hot enough to utilize for Instead of steam passing through the turbine, a direct use and/or electrical power generation. This lower-boiling-point liquid, a working fluid such as concept is called enhanced geothermal system, or isobutene, isopentane, or a refrigerant, is heated in a EGS. heat exchanger by the geothermal water. It becomes a vapor and is then sent through a turbine. No water Projects are now operating in France, Germany, and (either as liquid or steam) passes through the turbine Austria, where six small EGS projects are generating in this instance. Once through the turbine, the vapor between 0.25 MW and 3.5 MW of electrical power is condensed and pumped back through the heat from wells between 7000 feet and 16,000 feet deep exchanger again and again. The geothermal fluid and at temperatures from 300oF to 500oF. After the in this case is also returned to the reservoir to mine power is generated, additional heat is sometimes more heat. removed from the water for space heating as a part of some of the projects. These expensive, government-supported research projects have taken many years to develop. With this experience in hand, Germany has recently announced plans for over 100 future projects with outputs as high as 8.5 MW for some of them. In Australia numerous press releases tout much higher potential megawatt outputs, but no projects are yet on line. 138
  • 139. Alaskan Resource Potential Known Geothermal Areas:Relatively little is known about the most effectivemethods for implementing an enhanced geothermal Alaska has a number of documented shallowsystem. Many variables such as the temperatures, sources of heat along its southern margin and in thethe temperature gradient, the type and characteristics central part of the state. For physical and economicof rocks present, and the existing stresses on reasons many of these resources are under-exploredthe rocks, need to be considered in planning an and undeveloped. These known geothermal areasenhanced geothermal project. Within Alaska there range from modest temperature thermal springsmust be some areas where the overall conditions are like Pilgrim, Chena, and Manley to large areas ofmore favorable for such a project than other areas. hot springs found on or near active volcanoes. TheEach area is unique, and all variables need to be locations of all major thermal springs in Alaskaassessed to determine the feasibility of an enhanced have been identified, but some lack basic descriptivegeothermal system. Development of enhanced information such as flow rate and geochemistry.geothermal systems will continue to be mostly These springs represent a thermal and massexperimental in the next years. The EGS concept discharge point from a geothermal system that maybears close watching because enhanced geothermal support could be part of Alaska’s future. Blind Geothermal Systems: Blind geothermal systems are those without surface manifestations. These systems are the subject of much debate within the geothermal community. Whether blind systems exist in Alaska is unknown at this time. Precious little subsurface temperature data exist to indicate the presence of such systems. Nevertheless, a significant amount of additional geologic information is available to help determine if an area is likely to contain such anomalous features. In the absence of detailed thermal gradient information is impossible to say categorically that small geothermal anomalies do not exist, but substantial supportive geologic information can help in the evaluation of potential areas for exploration. 139
  • 140. I After the power plant is built and in operation,Project Information n order to put together a geothermal power reservoir monitoring and management are needed to plant project, details about the resource and optimize the system and to determine strategies for where and how the electricity will be consumed maximizing the life of the resource. It commonly must be known. In the simplest possible case takes ten years from the start of exploration to (similar to the case of Chena Hot Springs the commissioning of a power plant for projects Resort), a small amount of power is developed exceeding 10 megawatts in capacity. Small projects and used within a small area by the owner of of < 1 megawatt to 2 or 3 megawatts can be the resource. However, ownership is often completed in 2 or 3 years. complicated when the surface and subsurface (including the geothermal resource) are owned Operational geothermal power plants have an by different entities, or when there are numerous excellent worldwide record of reliably producing landowners in the vicinity of the site. power for decades with modest environmental impacts and low operation and maintenance costs, Developing a geothermal resource includes a provided that the resource is properly managed and number of critical steps that must be strictly not overdeveloped. adhered to. The first and most important step is that of identifying and characterizing the resource potential and capabilities for economic power generation. The simple occurrence of a hot or warm spring at the surface is not sufficient evidence for a developable resource. The size, flowability, sustainability, and ultimate heat flow are all difficult determinations that must be made with great care. The initial exploration phase can be costly and has a high risk of economic failure. The exploration and development phases needed to characterize and sanction power plant construction will involve procuring permits, expertise, and equipment to collect and interpret data on geology, geochemistry, geophysics, and temperatures, so that wells can be sited and drilled into the reservoir. Once one or more wells have been drilled and the reservoir is identified, flow testing and reservoir engineering assessments are needed to determine the possible size and productivity of a reservoir, and also to determine how the reservoir will be produced and managed. At this time, the power plant can be designed and equipment can be chosen to best suit the reservoir. Adequate financing will be needed for construction of the power plant and any transmission line. 140
  • 141. Potential Reduction in Cost of Energy Project InformationM ost geothermal resources that could now be developed in Alaska are larger than needed to satisfylocal demand, or significantly remote requiring substantial investment in transmission lines. Accordingto the paper, ‘Factors Affecting Costs of Geothermal Power Development;’ published by the GeothermalEnergy Association, capital costs for a geothermal project can be broken down as follows. It is importantto note that these relative costs can vary significantly depending on remoteness of the resource and accessto equipment and technologies:Total capital costs, including all elements of development shown in the figure above, ranged from$3000 - $3900 per kW for a large (100MW) plant in 2007 dollars. A smaller plant, such as the oneinstalled at Chena Hot Springs, is expected to cost more. Considering exploration and all other elements ofthe Chena project, the total capital cost of the project was $6275 per kW.Operating and maintenance costs for a geothermal power plant are an estimated $15 MW-$30 per MW, or1.5¢-3¢ per kWh. For the Chena project, O&M costs were calculated at 2¢ per kWh. 141
  • 142. Manufacturer OptionsManufacturer Options Manufacturer OptionsThe following lis a ist of manufacturers and engineering firms who build geothermal turbines and/or powerplants: Steam Manufacturer/ Location Device Name Website Turbine or Contractor Binary Fuji Electric Japan Steam turbines Steam Group www.mitsubishitoday. Mitsubishi Japan Steam turbines Steam com Toshiba Japan Steam turbines Steam Geothermal Ormat Israel Both turbines Geothermal Rotoflow USA Binary turbines Geothermal Mafi-Trench USA Binary turbines United Geothermal USA Binary Technologies turbines Power Plant design and Idaho Both Engineers construction Geothermal Plant design and Development Nevada Both construction Associates The Industrial Plant design and Colorado Both Company construction Processes Plant design and Unlimited California Both construction International 142
  • 143. Current Activity in Alaska Northeast of Fairbanks, Chena is home to the only operatingChena geothermal power plant in Alaska. See the case study for moreHot Springs information. Pilgrim was the site of another Department of Energy drilling program. The resource appears to have development potential using binary power generation equipment, but the source ofPilgrim the geothermal fluid was never identified. Pilgrim is locatedHot Springs approximately 50 miles from Nome, and a recent study suggests that if proven adequate, it may be economical to develop the resource to supply power to Nome. The Makushin geothermal resource near the community of Dutch Harbor on Unalaska (Aleutians) is the only proven high temperatureUnalaska geothermal system in Alaska that could be used for power generation. An exploratory drilling program, which took place in the early 1980s and was funded by the Department of Energy, made this determination. The community of Akutan (Aleutians) is considering optionsAkutan for developing a nearby resource located in Hot Springs Bay, approximately 10 miles from the community. 143
  • 144. Current Activity in Alaska The Alaska Peninsula community of Naknek is conducting a Naknek geothermal exploration program. Manley, on the Tanana River, is a resource similar to the one at Manley Chena. It has the potential to supply 100% of the power and Hot Springs possibly the heat to the community; however, the project is complicated by land ownership issues. The Mt. Spurr volcano, across Cook Inlet from Anchorage, is a unproven resource, but its proximity to Anchorage, makes it worth Mt. Spurr further assessment. Ormat, a geothermal developer and power plant manufacturer, recently won a competitive bid process and purchased all but one lease section on the volcano. Other regional assessments have been proposed, as well as development of other resources. However, no additional activity has taken place at other sites in the past 10 years. 144
  • 145. Case Study: Chena Hot Springs ResortC hena Hot Springs Resort is a privately ownedfacility located 60 miles northeast of Fairbanks. 87%, with an average net output of 174 kW per unit. The reduced capacity factor is due to flow rates on the hot water side averaging approximately 60 gpm belowChena is located 33 miles from the nearest electric the rate for which the system was designed. Whengrid and maintains its own generation facility and both units are online, this flow rate is further reducedapproximately 3 miles of distribution lines. Prior to per unit for a total plant output of 280 kW (70%2006, Chena used diesel engines to supply power to capacity factor). The power plant is designed to bethe site, with an average load of 180 kW. In 2006, dually cooled, using cold water in the summer, and airChena installed a 400 kW geothermal power plant or water in the winter. During intermediate seasons,consisting of two 200 kW PureCycle 200 modules unit output has been reduced as a combined effectdesigned and manufactured by United Technologies of less available cooling water flow and inefficientCorporation. Chena is currently in the process of operation of the air-cooled condensers at temperaturesinstalling a third 280 kW production model PureCycle above 0 °F-10 °F. This issue should be mitigated by200, for a total installed capacity of 680 kW. the installation of a cooling pond in 2008.The power plant is unique because it was designed Installation of the geothermal modules has resulted into work using geothermal fluids at 165°F, which is a a 50% reduction in gallons of fuel purchased at Chenasignificantly lower temperature than that of the fluids (compared with fuel purchases prior to the installationused at other geothermal sites for commercial power during times the power plant was operating). Greatergeneration. The United Technologies equipment is fuel savings have not yet been realized, becausebased on refrigeration components from its subsidiary the generators were designed to be grid connected,company, Carrier Refrigeration. Originally designed they use induction generators that require a stablefor industrial waste heat applications, the power frequency and voltage to operate properly. A 1.5plant modules were and modified for this geothermal MWh UPS system was installed to provide gridapplication. In the winter, the units are air cooled or stability, but there were initial problems integratingwater cooled (via a cooling pond installed in 2008), it into the existing power generation system. Thisand water cooled in the summer. Project capital costs resulted in challenges with completely eliminating thetotaled $1,926,962, which was partially offset by a diesel engines and operating both power plant modules$246,288 grant from the Alaska Energy Authority. simultaneously without overpowering the grid. ForThis included the drilling of a geothermal production this reason, in 2007 and the first half of 2008, only onewell, but it did not include any exploration costs. power plant module was typically in service at a time,Those were partially covered under a Department and thus actual fuel saving were just half of what wasof Energy grant. The project also used numerous expected. This issue has been resolved, and now bothrecycled components including 4200 ft of pipeline and units are operating for a total net output of 280 kW.a 1.5 MWh UPS system, which reduced the cost of the The third unit, a larger 280 kW PureCycle module, isproject significantly. expected to be online by the end of 2008, bringing the total installed capacity to 680 kW.During its first 27 months of operation, the powerplant logged 18,722 hours at 99.4% availability, Overall fuel offset in the first 26 months of operationexcluding five weeks of repairs after a fire occurred in was 228,000 gallons for a total savings of $650,873.the building in May 2007. During this repair period,the unit operated with an average capacity factor of 145
  • 146. Case StudyAbove: The 400 kW geothermal power plant at Chena HotSprings. Named the Chena Chiller. This unit is unique inthat it is designed to work with geothermal fluids muchcooler than any other plant.Right: This artesian well is located at Chena Hot SpringsResort and flows at around 300 gpm.Facing page top: An old greenhouse at Chena Hot Springsis surrounded by naturally heated water.Facing page bottom: An injection well is being drilled forthe geothermal power plant at Chena. 146
  • 147. Chena Hot Springs ResortThis takes into account a 116% increase in site load,to an average of 430 kW since installation of thegeothermal power plant. This increase is due to theinstallation of a production greenhouse (75 kW load),the addition of electric appliances in the hotel roomsand restrooms, addition of plug-ins for vehicles, andan increase in site pump loads. Assuming outputremains constant, the simple payback at current (2008)fuel prices will be realized in just over 6 years (theend of 2012) from the date of installation. O&Mand debt load for the project are currently $73,500per year. The addition of these values results in a netpayback of 8 years from an installation date at the endof 2014. This could be reduced to 5 years if all unitsare operated simultaneously and greater fuel savingsare realized.Chena is also planning to drill a deeper well in 2009to access the deeper reservoir to produce highertemperature fluids. This improved efficiency of thepower plant will reduce the total volume of waterrequired for operation. 147
  • 148. ConclusionsAlaska Geothermal Working GroupRecommendations: I t could be argued that geothermal energy is one of the most sustainable and environmentally • Create regional geothermal development plans to combine resources (drill rig, exploration friendly energy resources that can be developed. equipment, expertise) Unfortunately, geothermal heat needs to be close enough to the surface and in the right geologic • Consensus is that power is highest use of setting to make it economically feasible for geothermal in power generation, however there development. This rare occurrence in Alaska. It should also be an assessment of the potential is tantalizing to presume that if one drills deep for other uses such as for greenhouses (food enough there will be a heat resource that can be production), mineral processing center operation exploited, but experience in the development in Aleutians, absorption chilling, and producing of deep subsurface fluid flow systems shows a alternative fuels. Mineral recovery from sobering reality regarding the extreme costs and geothermal brines is also a possible area for risks associated with these activities. Nevertheless, research in areas where large geothermal resources are present and relatively easily accessible, geothermal • Develop a state drilling program as part of the electrical power generation has been shown to be state energy plan cost competitive with large-scale coal, natural gas, or nuclear power generation. In remote areas, such as • Put together set of criteria that helps rank and the islands of Indonesia, Japan, and the Philippines, prioritize projects throughout the state where other forms of energy are expensive and difficult to come by, geothermal power generation, • Consider ground source heat pumps in areas is the dominant method of power generation and where appropriate some fields have now been operating for almost 50 years. The primary challenge for developing geothermal power when the potential exists is locating, developing, and managing the resource in an economic manner. With continued research and development, a wide variety of geothermal power plants has been designed and built to operate on a wide variety of resources with temperatures ranging from 165OF - 650OF. Continued research in areas such as EGS will be important in furthering the value of geothermal energy as a substantial energy alternative. As new technology is brought forth, the geothermal resources present in Alaska should be constantly evaluated and developed where physically and economically feasible. The remote location of a number of geothermal resources relative to population centers and transmission grid is a difficult hurdle to overcome. In Alaska, developing strategies for using geothermal resources is likely to prove as difficult as actually developing the resources, yet given the potential, this development is well worth the effort. 148
  • 149. ReferencesAlaska Energy Authority GeothermalWebpage: Geothermal Resources Council in Davis, California( has an excellent website devoted togeothermal development. For its members it has the mostextensive on-line library in the world. A second websitefor accessing technical geothermal papers is the U. S.Department of Energy Office of Scientific and TechnicalInformation (, C., (2005), Factors affecting costs of geothermalpower development, Geothermal Energy Association,Washington DC.The Future of Geothermal Energy – Tester et. al. Publishedby the MIT press, 2006.Nome Energy Study 149
  • 150. Heat Pumps for Space HeatingAEA Program Manager: David Lockard (771-3062)IntroductionH eat pumps for space and water heating,while increasingly common in the Lower 48, are from traditional geothermal heating; they can be installed across a wide range of geographic locations and ground temperatures. In contrast, traditionaloften overlooked in Alaska. Most systems are geothermal heating is restricted to relatively confineddesigned to provide space heat in the winter and areas with abnormally high temperature gradients,air conditioning in the summer. Traditionally, they such as near hot springs, and can thus be used tohave been installed in moderate climates, often in heat indoor spaces without the use of a heat pump.buildings that would otherwise use electric resistance Approximately 50,000 Ground-source heat pumpsheating. Now several varieties of heat pumps are and over 500,000 total systems are installed in theavailable for colder climates and may be suitable United States each year.for use in Alaska. Ground-source heat pumps differ Basic Heat Pump Configuration Heat out Heat in Evaporator Condenser Compressor Expansion Valve150
  • 151. Heat Pump Technology OverviewH eat pumps, while electrically operated, aredistinctly different from resistance electrical heaters. The COP is largely dependent on the temperature difference between the source and sink, and theHeat pumps are devices that transfer heat from a greater the difference, the lower the COP. Forlower temperature reservoir, usually the ambient example, a heat pump operating between a ground orenvironment, to a higher temperature sink. The low air temperature of 45°F and an inside temperature oftemperature reservoir is usually the air, the ground, 70°F has a much higher COP than the same systemor a body of water, and it is essentially an unlimited operating between 0°F and an inside temperature ofsource of heat. This heat, while unlimited, does not 70°F. Typical COPs for heat pumps tend to be in thecome without cost; work in the form of electricity is range of 1.5 to 6. This is sometimes described as anrequired to pump it to the high-temperature sink. efficiency of 150% – 600%. ­Heat pumps work on the same principle as Heat pumps are classified as either air-source heatrefrigerators and air conditioners. All remove heat pumps or ground-source heat pumps. Air-sourcefrom a cold temperature source and pump it to a heat pumps, as their name implies, extract heathigher temperature sink. The difference is simply in from the ambient air. They are the easier and lessthe desired effect – cooling vs. heating. expensive type to install. Because the COP is a function of the outdoor air temperature, it will varyA simplified heat pump contains four main parts: a widely. This variable COP shows one of the air-cold source heat exchanger called the evaporator, source heat pump’s main disadvantages in colda compressor, a high-temperature heat exchanger climates – peak heating demands coincide with thecalled the condenser, and an expansion valve. This unit’s lowest COP. Heat is therefore most expensivesystem is filled with a working fluid, such as the when it is most needed. Nonetheless, there are arefrigerant R‑410A. A diagram of this system is number of recent innovations that have led to theshown on the previous page. development of air-source heat pumps suitable for use down to 0°F.In the evaporator, heat is absorbed, vaporizingthe refrigerant. This vapor is then compressed, Ground-source heat pumps have been in use sinceraising its temperature and pressure. The now hot the late 1940s and use the relatively constantrefrigerant vapor is piped to the condenser, where temperature of the earth instead of the outside air forits heat is removed and used for heating. During the heat source. This allows the systems to operatethis heat transfer process, the refrigerant condenses with a higher COP in colder weather, making themback to a liquid. This liquid then passes through more appropriate for use in much of Alaska. Asthe expansion valve to the low-pressure side of the with air-source heat pumps, the COP is highest whensystem, and the cycle repeats. the difference between the ground temperature and indoor temperature is lowest. Therefore, the colderThe effectiveness of a heat pump is called its the ground, the less efficient the system.Coefficient of Performance (COP). The COP is theratio of heat output to work input. For example, a There are many configurations for ground-sourceheat pump operating with a COP of 5 will produce 5 heat pumps, including an open loop heat pump thatkWh of heat for every 1 kWh of electricity supplied. pumps water directly from a well or body of waterFor this reason, the ‘efficiency’ of a heat pump is and extracts heat before returning the water backoften listed as greater than 100%. to the same water body or to another one. A dual source heat pump combines an air-source heat pump with a ground-source heat pump. 151
  • 152. HProject Information eat pumps have been installed in several for forced-air heating with the air handler built into parts of the state, including the Mat-Su/ the unit. There would be no backup heat for this Anchorage area, Juneau, and Kodiak. There type of installation, since the unit would take the have also been a few systems installed near place of the existing oil-fired air handler equipment. Fairbanks, but these were primarily prototype Hence, sizing would need to be adequate for the installations and cost savings have not yet been complete heating load of the home, or other backup demonstrated. systems such as electrical resistance heaters would be needed. Ground-source heat pump installations require either horizontal or vertical installation of In organized cities and service areas permits are heat exchanger loops below the ground. This required for any heating installation. Lake loops requires significant heavy equipment, which generally require a permit process with several may not be readily available in many parts of governmental agencies involved, such as the Alaska the state. For example, a drill rig is needed for Departments of Environmental Conservation (DEC), vertical installations. In addition, these systems Natural Resources, U.S. Fish and Wildlife, and Army still require electricity to operate and become Corps of Engineers. expensive to operate in areas where the cost of electricity, relative to fuel, is high. They For open well systems, a less rigorous permitting may also be unsuitable for use in areas with process is required from DEC. A pilot project is permafrost, or where removing heat from the currently in place and conditionally approved ground might result in permafrost growing or for permanent operation. Results from this heaving. The combined high installation costs pilot project and approval will pave the way for and potentially high operating costs may make open well systems to become routine for the these systems inappropriate for rural Alaska; permitting process. Other systems such as closed however, they can prove economic in some road- loop horizontal or vertical installations are more accessible areas of the state. routine and have not been subject to permitting in unorganized areas. There are several installers of heat pump systems in Alaska, and local engineering firms can often design a system for a particular application. Expected payback period for an appropriately designed ground-source heat pump is 5–10 years. System life is estimated at 25 years for the in- home components and 50+ years for the ground loop. System retrofits in areas with oil as the primary heating source and with electrical costs under .13 per kWh have proven to be viable with oil costs above $2 per gallon. Conversion costs range from $25,000 to $30,000 for systems coupled to existing oil boilers with under floor radiant heat distribution already in place. The existing oil boiler acts as supplemental or backup heat for these installations. Systems also come configured 152
  • 153. Potential Reduction in Cost of EnergyH Project Information eat pumps in the right application can cut heating resistance heating may be more economical thancosts. The amount of savings is dependent on the oil heat. A heat pump installation may be morecost of heating fuel, the cost of electricity, and the economical than oil heat if the cost of 12 kWh isenvironment in which the heat pump is installed. less than the cost of a gallon of fuel.Furthermore, a change from combustion based heating(oil, natural gas, propane, coal, or wood) to heat However, the capital cost of the heat pump ispumps will eliminate combustion appliances and their often significantly more than the cost of electricassociated risks, pollution, greenhouse gas emissions, resistance heat or an oil heating system unlessand maintenance. air conditioning is required An example can be found in the Pacific Northwest. The hydropowerBecause they are electrically operated, a widespread supplied by the dams on the Columbia Rivershift toward heat pumps will have consequences for has made electricity inexpensive in that region.electric utilities; distribution system upgrades may As a result, much of the residential heating isbe necessary to accommodate the increased electrical done electrically, either with heat pumps or withdemand. Building owners may also have to update standard resistance heating. A similar situationtheir service entrances to handle the additional may occur in areas of the Alaska Railbelt that useelectrical load. oil for heating if, for example, the Susitna Dam is built.One of the primary factors in evaluating a heatpump is the cost of electricity and the need for airconditioning. As a rule of thumb, if the cost of30 kWh is less than the cost of a gallon of fuel, electric 153
  • 154. Case Study: Juneau AirportT he Juneau Airport secured funding in October2008 to install a ground-source heat system. The State million and $268,000, respectively). The fuel oil system would use 40,825 gallons of fuel and 212,000of Alaska provided a grant for half of the cost of the kWh of electricity annually. Assuming a fuel oil priceproject, with the City of Juneau paying for the rest. of $3.31 and an electric price of 7.9¢ per kWh, theThe system is designed and will be built by Alaska ground-source heat project is expected to save overEnergy Engineering LLC. $85,000 in annual energy costs. Note that the need for air conditioning is an important contributor to theThe system involves 215 vertical wells, each 175 feet economics of this project.deep with 0.75 inch high-density polyethylene piping.The heat pumps will supply both heat in the winter A similar project is proposed that will produce 4.1and cool air in the summer by using the ground-source billion BTUs annually to meet approximately 81% ofheat in a reversible compressor/condenser cycle, with heat load for a new pool in Juneau. It is expected tothe primary product being winter heat. Alaska Energy cost $2 million and to eliminate either 63,200 gallonsEngineering estimates a 260% energy efficiency for of fuel oil or 1.5 million kWh annually. Annual O&Mthe system. costs are estimated at $113,220.Alaska Energy Engineering has calculated the capitalcost of this project at $6.05 million with annualelectric use of 656,000 kWh and annual O&M costsof $644,000. This project is being built instead of analternative fuel oil system. The fuel oil system wouldhave lower capital and annual O&M costs ($5.23 154
  • 155. ConclusionH eat pumps may become more common in Alaskain places that have expensive heating fuels andrelatively cheap electricity. They are relatively easyto engineer, design, and install; and they can saveenergy. A general recommendation on when to installa heat pump over a traditional system is beyond thescope of this document. The decision must be basedin part on the available thermal resource, the cost andavailability of electricity, the cost of fuel, and capitalcosts. Specific recommendations will vary by regionand are currently done on a case-by-case basis.ReferencesAlaska Energy Engineering LLC, Ground-source HeatPump Feasibility Study: Life Cycle Cost Analysis.December 2007 155
  • 156. Solar Energy TechnologiesAEA Program Manager: Peter Crimp (771-3039) A solar paneled roof makes efficient use of space and provides a source of power. TECHNOLOGY SNAPSHOT: SOLAR Solar heating – 128 GigaWattsInstalled capacity (Worldwide) Photovoltaic electrical – 7 GigaWattsInstalled Capacity (Alaska) 100s of kW Statewide, best in areas with less precipitation andResource Distribution with southern exposure Best use is for individual installations where there isNumber of communities impacted no grid powerTechnology Readiness CommercialEnvironmental Impact Minimal, small footprints, no CO2 emissions Payback is dependent on fuel oil prices and localEconomic Status resource156
  • 157. 157
  • 158. IntroductionE nergy technologies that use the sun’s radiationdirectly are referred to as solar energy technologies. Technologies that use equipment to move or store solar energy from where it is incident to somewhereThese technologies may be employed to heat or else are referred to as active solar systems.light living space directly, to supply energy to a heat Examples of these active system technologies arestorage system for later use, or to generate electricity. hot water systems where water is heated and the heat is stored in a reservoir, systems where highSolar energy provides a growing but still small temperatures are generated to produce steam tofraction of energy throughout the world. To put generate electricity through conventional steamsolar energy use into perspective, the U.S. Energy turbines, or photovoltaic systems where solar energyInformation Agency estimates that worldwide generates electricity directly in a semiconductorelectrical generation from all energy sources for solar cell.2005 was 18 trillion kilowatt hours. According tothe International Energy Agency, worldwide solar The solar resource in Alaska is significant, but itphotovoltaic electrical generation was approximately varies dramatically with the latitude, time of year,7.7 billion kilowatt hours in 2006, about 0.05% of and weather. In the northernmost portions of thetotal electrical generation. Likewise, heating energy state, there is abundant sunlight up to 24 hours perproduced by solar, while about 10 times that of solar day in June, with no sunlight in December. In lessphotovoltaic electric energy production, was also a extreme northern latitudes, the resource potential istiny fraction of total electrical generation. distributed over a greater portion of the year. If solar energy is used for lighting, systems can be optimizedDirect use of solar energy for heating or lighting for direct sunlight or for diffuse sunlight when skiesis often referred to as passive solar use. The term are overcast, but the strategies differ; it is importantpassive is used because a building employs solar to design for the condition that by virtue of its design without requiring When solar energy is used for heating or electricaladditional equipment to actively move or store generation, direct sunlight is the most effective formenergy. In other words, passive solar systems use the of solar radiation to use. In either case, buildingenergy of the sun where it falls. A clothesline is a systems must be able to operate with or without thesimple example of a passive solar energy device. In solar resource.this same way designers strive to employ generallyconventional materials and building components to Major challenges to using solar energy in Alaskaadvantageously use the sun’s energy in buildings. are its seasonal variability and its dependence onImplementing a passive solar energy strategy weather conditions. In general, the solar resourceinvolves many decisions, from the location of the is most abundant in the summer, when it is leastbuilding and its overall shape, to the placement needed. However, there is a reasonable resourceof windows and skylights, to the materials to be available for seven to eight months of the year forused inside the structure. In temperate latitudes this all but the most northern areas of the state. Directfunctions well. There is a pronounced daily solar heating and daylighting with the sun require minimalcycle. The days are not inordinately short in the technology, but they rely on good building designwinter, and there is a regular cycle of warmer days to prevent overloading in the summer months andand cooler nights. to promote energy gathering during the shorter days closer to the winter season.158
  • 159. Solar TechnologiesT wo major factors should be considered whenemploying solar energy in Alaska: the abundance of kilowatt hour for the past five years. Lime Village, which has an installed photovoltaic system, hassunlight when the energy is needed and the cost of electrical costs of $1.26 per kilowatt hour. Stony Riverother forms of energy. Technologies other than solar pays $1.01 per kilowatt hour.must carry the load during the dark times of the yearin Alaska. For this reason, the addition of a solar Solar hot water systems offer more promise inauxiliary system will not reduce the capital cost of a Alaska than photovoltaic electrical generation does,primary heating or electrical system. Primary systems although the present installed cost of systems is stillmust be designed to operate for months without expensive. Solar hot water systems suitable for Alaskabenefit of significant solar input. can provide hot water for space heat or for domestic use. The low density of the Alaskan solar resourceActive systems hold the most promise for Alaskan precludes the economical use of high temperatureapplications. These are systems that can store solar technologies, such as systems that generateenergy for longer periods of time or be incorporated steam to produce electricity. As an example of theas auxiliary energy sources into existing energy difference between the cost of solar hot water and hotsystems. Active systems also lend themselves to being water from fuel oil, consider a household-sized solarcontrolled automatically. Because of the seasonal hot water system with an energy cost spread overnature of the solar resource in Alaska, passive solar twenty years. The cost of the solar energy would bedesigns yield only modest benefits, since they cannot approximately $100 per million Btu. The cost of thatstore solar energy for an extended period of time. same energy from fuel oil, if the fuel price were $6Passive solar lighting systems use sunlight only during per gallon, would be about $40. There might be somethe daylight hours. Passive heat systems are generally rural villages where solar could be an economicaleffective for some hours (in some cases a few days) component of an energy system. On the road system,after collecting solar energy, and they often require where fuel oil is less expensive, some might wish toactive participation in the building operation. use solar hot water for reasons other than fuel oil price alone.Active solar systems most suitable for Alaska arephotovoltaic systems and solar hot water systems.Except for specific niche applications, it is unlikelythat photovoltaic electrical generation is suitablefor reducing the cost of electricity in Alaska. Grid-connected photovoltaic systems offer the mosteconomical means of generating electricity withsunlight. At current prices an installed, grid-connectedsystem in Interior Alaska could produce electricity forapproximately $1.50 per kilowatt hour. Connectionto an electrical grid enables a photovoltaic system toavoid expensive electrical storage.The cost of solar-generated electricity in remote areaswith no electrical grid available would be significantlyhigher due to the cost of additional batteries andinverters. There have been only two Alaskan villageswith average electrical kilowatt hour costs over $1 per 159
  • 160. ConclusionsS olar holds little promise to economically reduceAlaska’s dependence on fossil energy. Prices for Referencessolar electric systems and solar hot water systemsmake them more expensive than conventional fuel Web-basedtechnologies. Although the fuel is free for solartechnologies, the capital cost is not. It is conceivable The website has excellentthat innovative design for specific applications could information, including a number of publications related toreduce the capital cost of a system. Then the solar solar installations in Alaska, and a list of contractors and water system might be able to economicallyoffset fuel oil use. Solar hot water systems havemany components that are used in conventional fuel Othersystems, and the capital cost of the solar systems Werner Weiss, Irene Bergmann, Gerhard Faningeris a combination of the costs of these numerous Solar Heat Worldwide, edition 2008, Markets andcomponents. On the other hand, the cost of a Contribution to the Energy Supply 2006, Internationalphotovoltaic system resides primarily in photovoltaic Energy Agency Solar Heating & Cooling Programme,panels themselves, and this cost is determined by the May 2008.worldwide market. It is unlikely that innovations inend-use design will significantly change the capitalcosts of solar electric installations.In Alaska, the best candidates for solar use would besites off of the road system that operate only in thesummer months.160
  • 161. Alaska Coal Energy Resources AEA Program Manager: Mike Harper (771-3025) The coal powered heat plant at UAF as seen during Winter Solstice. TECHNOLOGY SNAPSHOT: COAL Recoverable coal is approximately 998 billion short tons (2004Coal Resources (Worldwide) numbers) Approximately 491 billion short tons of demonstrated reserves,Coal Resources (National) estimated 275 billion tons recoverable (2007 numbers) 170 billion short tons identified resources; approximately 5.6 trillionCoal Resources (Alaska) short tons of hypothetical coal resources Distributed in eight major coal provinces and numerous smaller coalResource Distribution (Alaska) fields and occurrencesNumber of communities with Over 40potential coal resourcesTechnology Readiness Proven technology for electrical power generation and space heating Surface mining requires reclamation. Combustion for electricalEnvironmental Impact power generation must meet EPA requirements Economically mined in Interior Alaska (Healy) for power generationEconomic Status and some space heating, active coal exploration in Western Arctic, Cook Inlet and Alaska Peninsula 161
  • 162. IntroductionC oal is a brownish-black to black combustibleorganic sedimentary rock formed by the In general, hypothetical resources are located within broad areas of known coal fields where pointsdecomposition of plant material, most often in of observation are absent and evidence is froma swampy or boggy environment. This organic distant outcrops, drill holes, or wells, and wherematerial or peat is buried, compacted, and hardened coal may reasonably be expected to exist in knownover millions of years. This process is called mining districts under known geologic conditions.coalification. During Additionally, thecoalification, peat classification of coalundergoes several changes Summary of Total Alaskan Coal Resources resources is based onas a result of bacterial the mineable thicknessdecay, compaction, Resource Total Resources of the coal seam.heat, and time. Peat Category (in millions of short tons)deposits vary and contain The United States iseverything from pristine Measured resources 6,500 estimated to containplant parts like roots, bark, 30% of the world’s coalspores, etc. to decayed resources. Alaska is Identified resources 170,000plants. In coalification, believed to hold aboutpeat passes through four Hypothetical half of that. Most coalmain phases of coal 5,600,000 resources in Alaska resourcesdevelopment: lignite, are in the hypotheticalsub-bituminous coal, resource class becausebituminous coal, and anthracite. These end products they have been poorly studied, there are few dataare composed primarily of carbon, hydrogen, points of measurement, and there has been littleoxygen, and some sulfur along with water moisture or no drilling to substantiate resource estimates.and non-combustible ash. The amount of carbon and Identified resources are about 170 billion shortvolatiles (water and gas) as well as the amount of tons; however, coal-bearing strata underlie aboutenergy content of the coal determine its rank. The 9% of Alaska’s land. The state’s total hypotheticalamount of energy in coal is expressed in British resources of coal are estimated to exceed 5.6 trillionthermal units (Btu) per pound. The higher the rank, tons.the greater the heating value.Based on reliability of data, coal resources areclassified into four classes that depend on standard-distances-from-points-of-thickness measurements.These are (1) measured, (2) indicated, (3) inferred,and (4) hypothetical. These four classes of coalresources are based on degree of geologic assurancethat the rank and quantity of a coal seam (or seams)have been estimated from high (measured) to lowest(hypothetical). Identified coal resources includemeasured, indicated, and inferred coal resources. Source: Kentucky Geological Survey,
  • 163. Overview of Alaska’s Coal BasinsT he major coal provinces in Alaska are NorthernAlaska, the Nenana area, the Cook Inlet-Matanuska Alaska’s coal is dominantly bituminous of Cretaceous age, or sub-bituminous of CretaceousValley, the Alaska Peninsula, and in the Gulf of and Tertiary age. Except for Mississippian coal ofAlaska and the Bering River. Potentially significant the westernmost Northern Alaska Province, Alaskaidentified coal resources are present in other coal resources formed in widespread deltaic andcoalfields on the Seward Peninsula, Yukon-Koyukuk, continental depositional systems during Cretaceousand Upper Yukon provinces. Numerous smaller coal and Tertiary time. The younger Tertiary age coalsbasins and minor coal occurrences are distributed formed within sedimentary basins are related tofrom southeast Alaska to the interior parts of the fault systems with complex gravity and strike-state. With a few exceptions, most Alaska coal is slip motions that controlled basin formation andlow in sulfur, in many cases containing less than influenced deposition by differential settling.0.5%. Alaska coals also exhibit low metallic traceelements, good ash-fusion characteristics, and lownitrogen content making them favorable for meetingenvironmental constraints on combustion in powerplants. Right: A residential coal-fed boiler in Healy. 163
  • 164. Overview of Alaska’s Coal Basins Identified Alaska Coal Resources by Province Millions of Province/Coal Field short tons Coal Rank Northern Alaska province High-volatile bituminous & sub- bituminous; extensive lignite and minor anthracite 150,000 (Identified resources.) ~3,600,000 (Hypothetical resources) Cook Inlet-Matanuska Province Beluga and Yentna fields 10,000 Sub-bituminous Kenai field (onshore only) 320 Sub-bituminous Matanuska field 150 High-volatile bituminous to anthracite Broad Pass field 50 Lignite Susitna field 110 Sub-bituminous Nenana Province Nenana basin proper 7,000 Sub-bituminous Little Tonzona field 1,500 Sub-bituminous Jarvis Creek field 75 Sub-bituminous Alaska Peninsula Province Chignik and Herendeen Bay fields, Unga I. 430 High-volatile bituminous Gulf of Alaska Province Bering River field 160 Low-volatile bituminous to anthracite Yukon-Koyukuk Province Tramway Bar field 15 High-volatile bituminous Upper Yukon Province Eagle field 10 Sub-bituminous and lignite Seward Peninsula Province Chicago Creek field 4.7 Lignite 164
  • 165. Overview of Alaska’s Coal Basins 165
  • 166. Historical and Current Production and ExplorationC oal was officially discovered in Alaska in1786, with the first documented production in In 2007, BHP Billiton Ltd. drilled nine holes in the western Arctic coalfields on land owned by Arctic1855. Small-scale mining is recorded at numerous Slope Regional Corporation. The purpose was tosites throughout the state, with local mines being test the thickness of the coal seams and evaluate thedeveloped to fuel river steamboats, placer gold quality of the coal in the historic Kuchiak Mine area,mines, and canneries before 1900. Significant first tested in 1994. Exploration continued in 2008,production began in 1917 after extension of the and BHP also began environmental baseline studiesAlaska Railroad into the Matanuska coalfield, and initiated cleanup activities at the Kuchiak Mine.and by 1968, more than 7 million short tons ofbituminous coal had been mined from the Matanuska PacRim Coal LP has also been active with continuedcoalfield, most of it for electrical power generation. environmental, permitting, and engineering workSignificant mining in the Matanuska field ceased in on the Chuitna Coal project west of Anchorage, on1968, when Cook Inlet natural gas replaced coal for the north side of Cook Inlet. The project is beingelectrical power generation in the Anchorage area. designed to mine 3 to 12 million short tons of coal per year from proven reserves of over 770 millionSince the end of World War I, coal has been mined short tons.continuously in the Healy coalfield, which is withinthe Nenana coal province. Alaska’s only operationalcoal mine today, the Usibelli Coal Mine, producessub-bituminous coal from its Two Bull Ridge minesite near Healy, with an output of 1.357 million shorttons of coal in 2007. Usibelli shipped over 308,146short tons of coal to Chile and supplied six powerplants in interior Alaska with approximately 900,000short tons of coal.166
  • 167. Conclusions A laska has vast resources of high quality, low sulfur coal that has great potential for providing energy locally and for export. Technology exists for extracting coal and for generating both electricity and space heating from it. The economics of coal mining through electrical power generation and space heating are well known for a given resource base. These economic models can be extrapolated for the economy-of-scale necessary for rural settings. Mine-mouth electrical power plants can greatly reduce the need to transport large volumes of coal, and electrons can be transmitted to a number of communities via power lines rather than by hauling coal over great distances. Because there is a lack of detailed information on bed thickness and lateral extent of coal seams in many of Alaska’s coal provinces, the total volume of identified coal resources suitable for mining remains much lower than what is likely present. References American Society of Testing Materials (ASTM), 1995, Standard classification of coal by rank: ASTM designation D388-82, Philadelphia, 1995 Book of Standards, v. 5.05, pages 168-171. Clough, James, 2002, Coal Geology of Alaska, in 2002 Keystone Coal Industry manual, Chicago, Illinois, Primedia, p. 488-496. How is Coal Formed? February 26, 2006, Kentucky Geological Survey, University of Kentucky, http://www. Merritt, R.D., and Hawley, C.C., 1986, Map of Alaska’s coal resources: Alaska Division of Geological & Geophysical Surveys Special Report 37, 1 sheet, scale 1:2,500,000 Wood, G. H., Jr., Kehn, T.M., Carter, M.D., and Culbertson, W.C., 1983, Coal Resource Classification System of the U.S. Geological Survey. U.S. Geol. Surv. Circ. 891, 65 pages.A coal seam shows through aneroded bank near Healy. 167
  • 168. Natural GasDNR Program Manager; Robert Swenson, 451-5001 TECHNOLOGY SNAPSHOT: NATURAL GASCurrent Production (US) Over 25 trillion cubic feet annuallyCurrent Production in Alaska North Slope and Cook Inlet, 454 billon cubic feet North Slope and Cook InletResource Distribution Some exploration potential in other BasinsNumber of Communities Impacted Railbelt and North slope Proven exploration and production technology readilyTechnology Readiness available. Cleanest burning non-renewable. Exploration activity, productionEnvironmental Impact facilities, and pipelines must not adversely affect land and water resources.Economic Status Currently economic in Anchorage region and minor railbelt168
  • 169. IntroductionT he term ‘natural gas’ refers to a common andwidespread product of organic decomposition and Natural gas accumulations are a common source of clean burning energy throughout the world. Naturalit is found in varying quantities in nearly every part gas is used and transported in many forms includingof the planet. Natural Gas is produced in nature conventional pipeline distribution of gaseous form,by two distinct methods: (1) organic material is pressurized vessels of liquid propane (LP), andbroken down by bacterial decomposition with the liquefied natural gas (LNG) as a supercooled liquidby-product of methane (such as in peat bogs, land in unpressurized insulated containers. In the Unitedfills, or the digestive system of cattle), or (2) thermal States natural gas provides nearly 21 percent of thedecomposition where the by-product is both gas and energy supply, and the US Department of Energyliquids (such as coal or organic- rich sediments being (USDOE) forecasts that this consumption level willheated up deep within the earth to produce methane, climb slowly over the next decade, and then startpropane, other heavy gases, and oil). decreasing through the year 2030 (see figure 2). The USDOE also reports that natural gas will be theThe key challenge for using natural gas as an energy energy source for 900 of the next 1000 new powersource is our ability to economically collect it in plants being developed in the U.S.sufficient quantities so that it can be used for heatand power. Unfortunately, the very common bubbles In Alaska, natural gas is used to generate 54% ofseen in lakes and bogs cannot supply enough fuel for the electricity being consumed by industry andsustained energy production, so it is necessary to find the public. Figure 3 compares the amount of gasand tap into a place where nature has accumulated being consumed annually in the Anchorage areait over hundreds of thousands of years by a natural for residential use and power generation. Clearly,trapping mechanism. The most common forms natural gas makes up an important part of theof natural accumulation are: (1) conventional gas overall energy portfolio of Alaska and will for thereservoirs in porous rock deep within the earth, (2) foreseeable future. The dominant impedimentthick underground coal seams where the gas is both to increased use of natural gas in other parts oftrapped and adsorbed to the organic material (coal Alaska is the significant cost of exploration andbed methane), and (3) a newly emerging potential development, or of transportation from areas ofnatural gas source, hydrates, where the gas molecule large known accumulations to areas where it can beunder certain pressure and temperature conditions is utilized for heat and power by a smaller populationsurrounded and trapped by a crystalline structure of From Alaska Energy Authority, Energy Atlas 169
  • 170. IntroductionFigure 2: Total US consumption and projections of Natural Gas use by sector in Trillionsof cubic feet. From the US Department of Energy 70000 60000 50000 Thousand of Cubic Feet MMcf 40000 Residential Consumption 30000 Power Generation 20000 10000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YearFigure 3: Graph showing consumption of Natural Gas in Alaska for residential andelectricity production for the decade 1997-2007. Data from US Department of Energy. 170
  • 171. Natural Gas as a ResourceT he dominant molecule in most natural gasaccumulations is methane, but in many cases there oil. These types of source rocks are referred to as gas-prone and typically consist of organic materialare also minor amounts of other hydrocarbons such derived from land vegetation. These transformationsas propane, ethane, and butane. Thermally derived occur due the rise in temperature with increasingnatural gas comes from sedimentary rocks that depth below ground surface; geothermal heat. Thecontain elevated levels of organic molecules rich rate at which the temperature increases with depthin hydrogen and carbon atoms referred to as source is described by the geothermal gradient which, onrocks. The presence of the right kind of source rock average in drilled sedimentary basins of the world,in a sedimentary basin that has been subjected to the is about 50°F per 1,000 feet of depth. This meansright conditions of burial and increased temperature that the deeper we go beneath the earth’s surface, themay generate a natural gas accumulation, however warmer the rocks become. The part of a sedimentarymany complimentary conditions must be met. To basin where source rocks are buried deep enoughunderstand the for temperaturesrequirements for to be highan accumulation enough to causeof natural these thermalgas (and oil), conversionsgeologists use the is informallypetroleum system referred to asconcept where the “petroleuma functioning kitchen”.petroleum systemmust include the Whenfollowing five hydrocarbonselements: 1) source are generatedrock, 2) migration in the kitchen,pathway, their buoyancy3) reservoir rock, 4) seal rock, and 5) trap. quickly drives them to migrate out of the source rock following the path of least resistance through theWhen source rocks are slowly heated to the right most permeable strata they encounter. This migrationtemperature (between approximately 150°F and out of the source rock creates the possibility of250°F) organic molecules react to form the mix of trapping and accumulation in a reservoir rock.chainlike hydrocarbons we call crude oil. Sourcerocks heated to temperatures within this range, the Reservoir rocks are porous and permeable‘oil window,’ are said to be thermally mature for formations that can store oil and gas in pore spacesliquid hydrocarbons, but they commonly also begin between grains and later allow them to flow out ofgenerating natural gas in addition to oil. Source the rocks to wellbores, where they can be capable of generating oil are referred to as oil- Sandstones, limestones, and dolomites, under theprone and are typically derived from marine algae right conditions, can possess enough interconnectedand other microorganisms. When source rocks are pores to form good reservoir rocks. Some lowheated above 250°F they are described as overmature permeability rocks can still function as reservoirsfor oil, but can still generate significant quantities for natural gas, due to the lower density and greaterof natural gas. Source rocks that start out rich in buoyancy of gas. In order for the pores in a reservoircarbon but leaner in hydrogen (coal, some shale, and rock to become filled with gas (or oil, if present),limestone) can generate natural gas, but not the more it must be located along a hydrocarbon migrationhydrogen-rich liquid hydrocarbons found in crude pathway. If a pathway does not lead to a reservoir 171
  • 172. Natural Gas as a Resourcerock, the hydrocarbons may be lost to the surface from the kitchen. Moreover, they must then remainenvironment. intact, uncompromised by later folding, faulting, or excessive burial.Only where porous and permeable rocks areenclosed in trapping geometries does gas (and oil, Coal constitutes a special type of gas-prone sourceif present) stop migrating and accumulate in the rock that can generate gas either as a result of thereservoir rock to form fields. Effective traps consist thermal maturation described above, or throughof reservoir rocks overlain and/or laterally bounded microbial degradation at shallower depths in theby impermeable seal rock, and are of two basic absence of oxygen. Gas generated through the lattertypes. Structural traps occur where rock layers are process is referred to as biogenic gas. In buried coaldeformed by folding seams, biogenicor faulting to form gas molecules areconcave-downward typically dissolved inshapes capable of the surrounding porecontaining buoyant waters and storedfluids such as gas. in the coal matrix,Stratigraphic traps where methaneoccur where porous, molecules attachpermeable reservoir to coal are encased As long as the coalin impermeable seal remains buried atrocks as a result this same depth,of non-uniform it is subjected todeposition of the pressure ofsediments. the overlying rock and groundwaterFor example, (hydrostaticclean sands on pressure) anda wave-worked beach may grade laterally into a the methane molecules cannot form bubbles thatmuddy offshore setting, and with time, the muddy can migrate out of the coal. If the coal seam isoffshore zone may migrate over the older beach subsequently uplifted to shallower depths in thesand, setting up a possible future stratigraphic trap, basin, the hydrostatic pressure is reduced, allowingconsisting of a wedge of porous reservoir sands the methane to bubble out of solution and migratebetween the impermeable muds above and below. out of the coal seam. Once this migration starts,Structural traps are usually much easier to identify the gas follows the path of least resistance, asand generally host the initial oil and gas discoveries noted above, and will either migrate to a reservoirin a basin. Stratigraphic traps are much harder to in a trapping configuration, get stranded in smalltarget, and their successful prediction normally quantities in the subsurface, or will eventuallyrequires more detailed mapping of the subsurface migrate to the surface and be lost to the atmosphere.geology. This is best achieved by interpretinghigh-quality, closely spaced seismic data alongwith information gained from previously drilledsurrounding wells. In any case, in order for traps tohost gas fields (or oil), they must be created prior tohydrocarbon generation, expulsion, and migration 172
  • 173. Natural Gas Potential in AlaskaA laska is endowed with enormous provennatural gas resources. These known resources reside transformation can generate hydrocarbons. The onshore portion of the Hope basin includes knownexclusively on the North Slope and in Cook Inlet coal reserves in the vicinity of Chicago Creek,basin. Outside of these two regions, the presence southeast of Kotzebue. Coal in this area is ligniticof natural gas existing in large subsurface traps is and submature for thermogenic gas, but underunknown. However, several of the non-producing the right subsurface conditions could generatesedimentary basins include geologic characteristics biogenic methane. It is not known if the requisitethat suggest natural gas accumulations could be conditions for biogenic gas generation have beenpresent. These include the Copper River, Kandik, met in the Chicago Creek area. Other basins haveNenana, Yukon Flats, and the North Aleutian basin. been recognized around the state, including theThese basins are known to include organic-rich Minchumina, Holitna, and Selawik basins, but theirrocks that could be source rocks for natural gas if gas potential is uncertain owing to insufficient high-buried to depths within the kitchen where thermal quality surface and subsurface data. 173
  • 174. Conclusions SummaryA laska has many sedimentary basins that are N atural Gas is a clean burning energy alternative that enjoys widespread use around the world.known to include elements required for functioningpetroleum systems. To have a functioning petroleum Natural gas is the primary energy source for manysystem, a basin must include a source rock, Alaska residents, but because of transportationmigration pathway, reservoir rock, seal rock, and an difficulty and cost, its use is restricted to the areaseffective trap for gas. Detailed geologic information that contain identified fields found during industrial-is lacking from all of these basins that would allow scale exploration in the 1960s. The inherentrealistic evaluation of whether petroleum systems are economic risk and high cost of exploration haspresent. limited the amount of activity in many of the remote sedimentary basins in the state. Nevertheless, thereExploring for natural gas in Alaska’s non- are other areas that contain significant potentialcommercial basins will require modern, high-quality and the most economically feasible method ofsurface and subsurface data. The normal exploration exploring for natural gas in those areas is to facilitateprogression includes conducting detailed surface industrial scale exploration. The State of Alaska hasbedrock geologic mapping, acquiring reflection a number of programs and incentives that encourageseismic surveys, and finally, probing the most exploration in these areas, but the economies ofpromising areas by drilling wells evaluated with scale has limited the amount of activity. The Alaskamodern wireline geophysical log suites. Each Department of Natural Resources, and the Alaskastage of this cycle is typically more expensive Energy Authority are committed to finding ways tothan the preceding step, with costs associated with facilitate that activity, and to provide as diverse a seta remote exploration program ranging from 40 of energy options for the citizens as 100 million dollars. Currently, legacy datasetsfrom previous exploration cycles are availableonly for limited portions of the Copper River,Middle Tanana, and Yukon Flats-Kandik basins.Developing a significant natural gas discovery inone of Alaska’s non-producing basins could be veryexpensive unless the accumulation was located ata shallow depth and close to both the point of use(a rural community or group of communities) andtransportation infrastructure. Natural gas discoveriesthat do not meet the industry’s commercial economicmetrics due to size, gas production rate, location,development costs, or other factors, would need tobe evaluated for possible governmental subsidy, orremain undeveloped. 174
  • 175. Energy DeliveryTransmission Lines be delivered in either direction along that transmis- sion line. If a transmission line in the planning stageTransmission lines are used to deliver electrical is rerouted by a geothermal site, when the site isenergy from generation source to end-use location. developed, the geothermal energy can be deliveredThe electrical energy travels along wires in overhead to either end of the transmission line for use in thelines strung between towers or poles or in under- system.ground lines insulated from the earth. The voltage of Transmission lines can range in cost from $100,000/the transmission line usually depends on the distance mile to $2,000,000/mile depending on the volt-and the amount of energy being conducted. age, wire size, terrain, icing conditions, accessibil- ity, and structure type. Lower voltage systems ofTransmission lines can be deployed for several uses: 15,000 – 25,000 volts can run from $100,000/mile to1) To deliver electrical energy to a distant location $400,000/mile. Higher voltage systems of 69,000 –to increase coverage and reduce the overall cost of 230,000 volts can cost $300,000/mile to $2,000,000/delivered energy. AVEC is developing a micro-grid mile.system that allows for consolidation of generation.This consolidation can provide reduced overall costs In recent years, the use of Direct Current (DC) trans-through delivery of the single generator over a trans- mission lines to transmit electricity has increased.mission line to a neighboring community. The com- There are several trade-offs when using DC rathermunities of Toksook Bay, Tununak, and Nightmute than traditional AC electric transmission. Inverterare interconnected through the use of micro-grids. stations are required at each terminal to convert DC to AC, and that energy can be run through a trans-2) To deliver excess energy to an area that can former to increase or decrease voltage. The costutilize it. An example is the Swan – Tyee transmis- savings for reduced transmission line facilities maysion line, now under construction, that will deliver be masked by the increased cost of inverter stationspower from the Tyee Hydroelectric project for use in and harmonic reduction. The Battery Energy StorageKetchikan. System described in the Storage Technology sec- tion uses similar converter technology to convert the3) To reduce losses. If a single transmission line is 5,000-volt DC source from the batteries to 13,800delivering power between two points, adding another volts AC which can be interconnected with the exist-transmission line between those points, adding a sec- ing transmission system. DC systems are usuallyond line in parallel, will reduce the overall transmis- reserved for long transmission lines that deliver largesion line losses. The Northern Intertie from Healy amounts of power. ABB has a commercial HVDCto Fairbanks is an example a second line in parallel system called HVDC Lite. It is for systems under(with an existing line constructed in the 1960s). 100,000 kilowatts of energy transfer, and typically4) To increase reliability. Operating two lines used to reduce dynamic voltage and power swings toin parallel allows for one line to disconnect from which AC power systems are susceptible. Convert-service while the remaining line continues to deliver ers on the receiving end must be force-commutatedpower. to provide the constant 60-hertz or cycles per second that are required of standard AC systems.5) Routing a transmission line to interconnect a DC systems are significantly complex and should notnew resource. Routing a transmission line by a loca- casually be applied to the distribution of electricity.tion that can produce energy will allow the energy to 175
  • 176. Pipelines extension of the hydronic heat delivery systems used in homes today. Any hot water heat delivery systemsPipelines can be used to deliver liquid and gaseous that extend outside the heating envelope must beenergy products such as steam, hot water, crude oil, protected from freezing through the application ofnatural gas, petroleum liquids, and hydrogen. Steam antifreeze fluids.can be transferred over distances of approximatelyone mile, using the steam pressure as the motive Piping systems range in size from small residentialforce for delivery. For other product pipelines, com- systems that distribute hot water in a residence( ¾pressor stations or pump stations are required. Long inch to 1 inch piping), to neighborhood or districtpipelines typically require large transfer volumes to hot water systems( 2 inch to 6 inch range), to largeshare the fixed costs to be economical. Short, hot wa- industrial facilities that can deliver steam, natural gaster pipelines can be economical if there is adequate or crude oil). The largest pipeline in the state is thethermal insulation to reduce thermal heat loss from 42-inch Trans Alaska Pipeline System which deliversthe pipe system. Small area, neighborhood, hot water 800,000 barrels of crude oil daily from Prudhoe todelivery can be economic and can be viewed as an Valdez. Power lines in Beaver deliver electricity to residential locations throughout the remote village.176
  • 177. Pipeline travels under the Colville River. 177
  • 178. Golden Valley Electric Utility installed a Ni-Cad battery that has prevented over 256 power outages.178
  • 179. Energy Storage AEA Program Manager: Peter Crimp (771-3039)A battery system is anuninterruptible power supply. 179
  • 180. Introduction R enewable resources such as wind, solar, and hydro are abundant at some times and in some It should also be noted that in most cases storage is not an end in itself, but a bridge used as required to places, but they are not always available when and insure power quality or to simplify control. In most where they are needed. Other energy sources may applications, storage is used to bridge a low-cost be required to allow these renewable resources to be energy option like hydro or wind, to a higher-cost drawn upon at a later time when needed, or to switch energy option like natural gas or diesel, allowing to another generation source when renewables a seamless switch between the two. Long-term become unavailable. Alternatives can take the form storage is typically not economical. When compared, of storage or dispatchable generation technology that the capital and maintenance costs of storage can be used when required. technology are well above the cost of providing power with conventional The use of energy storage dispatchable generation. Storage can be classified by several key is considered by many as parameters: In some instances a case an essential component of future utility delivery can be made for storage on • Rated Power (kW) The rated power an expanded basis, where infrastructure throughout output available from the device under excess renewable energy is the United States. Energy normal operating conditions. stored for use at a later time, storage can be used in a • Rated Capacity (kWh) The total but this happens most often wide range of applications amount of available energy within the in locations with very high to improve availability storage system. costs for marginal power or in and reliability of delivered • Response time (Hz) The speed at places where natural storage power, to support variable which the storage device can respond options are readily available. distributed generation to changes in the power system. (including renewables), to stabilize transmission and Many strategies can be used distribution lines, or to time for energy storage, including shift consumption through bulk storage to achieve chemical storage (hydrogen or biofuels – see section the most efficient use of baseload generation. Many on alternative fuels), electrochemical (batteries, of these applications require short bursts of power fuel cells, and capacitors), electrical (capacitors), to balance and control energy, with discharge times mechanical (flywheels or pumped hydro), or thermal ranging from milliseconds to a few minutes. storage. The appropriate choice is made based on location, geography, accessibility, climate, and System configuration and design philosophy will local resources. All electrical storage systems add largely determine the incorporation of storage. flexibility to the electric grid, increasing the options Storage time can range anywhere from a long-term available for grid optimization and management. seasonal or annual basis, down to an hourly or even Which storage technology would perform best shorter basis. depends on local economics, the proposed application, and details of the site. 180
  • 181. Conventional Hydro time scale of a day or week. When power demand is low, typically at night, water is pumped into theThe simplest form of energy storage is seen in reservoir. During the day, when power needs areconventional, large-scale hydro, where dams create generally high, water is released to generate power.large reservoirs that capture maximum runoff in the In this way pumped hydro can be used to convertspring and release it over the year to provide energy undispatchable renewable power into dispatchablethe following winter. This can be compared to run- power.of-the-river hydrokinetic systems, where energy canbe extracted only from the river as it runs. Power is Where a suitable location can be found and largelowest when the river is lowest, which in Alaska is in storage capacity is required, a pumped storagethe winter when power demand is highest. However, system is the most cost-effective form of storageconventional hydro systems are costly and can be available. The right geographical location hasbuilt only where geography and markets coincide. adequate water, a moderate climate, and enoughFor larger applications, reservoir hydro projects can variation between times of low-cost power andbe combined with other large renewable power to high-cost power. Most pumped hydro facilitiesallow optimal dispatching of renewable applications. have been large, and limited attempts have been made to integrate them into remote power systems. Capacity and rated power are generally determinedPumped Hydro by geographical considerations, and power response is quite good; however, most conventional pumpedWhile conventional hydro simply uses flowing hydro facilities cannot quickly go from consumingwater as it is available, pumped hydro uses excess energy (pumping) to providing energy.electrical power to move water from a lowerelevation to a higher one. It then runs the water back Kodiak Electric Association (KEA) is consideringthrough a turbine to generate power during times of pumped hydro as a way to permit greater penetrationincreased demand. Usually these cycles occur on the of wind on their grid. As part of the planned Pillar Mountain Wind Farm project, KEA is a grid-isolated utility with generation including a combination of diesel generators and hydropower from their Terror Lake project. KEA is planning to install 4.5 MW of wind (from three General Electric 1.5 MW SLE wind turbines) for the first phase of their Pillar Mountain project. A second proposed phase would incorporate three additional GE turbines and push penetration in excess of 60%, but this is expected to result in difficulty maintaining grid stability and frequency regulation. KEA is currently assessing options for incorporating pumped hydro, as well as a small, conventional battery storage system to absorb power variations and insure that power availability as a whole remains high.Bradley Lake Hydroelectric Dam providesenergy to residents from the KenaiPeninsula to Fairbanks. 181
  • 182. Compressed Air Energy Storage (CAES) Batteries An idea similar to pumped hydro is compressed For electrical systems, batteries are the most direct air, which can also be used as a medium for storing way to store electrical energy. Batteries are used for excess energy. Air is compressed during times of many conventional systems, such as uninterruptable excess energy and run through a turbine when power power supplies, cell phones, and laptops. Although is needed. One major hurdle is finding a storage large batteries are available for power supply, the container of suitable size to hold enough compressed amount of energy stored in typical batteries is much air to store a useful amount of energy. smaller than the amount of energy used in residential Two plants are currently operational worldwide. In and commercial buildings, which means that many the Mackintosh, Alabama plant, large underground batteries need to be combined to provide appropriate caverns in salt domes have been created by solution capacity. Batteries are also relatively expensive. mining, which forms large scale, gas-tight volumes They have high maintenance cost and a limited ideal for storing compressed air. lifetime – perhaps five to six years in most remote power applications. This means that the cost of In Phoenix, Arizona, a compressed air storage storage (the cost of the battery divided by the total system has been developed that uses solar energy number of kW-hours of storage possible) is often to heat the air when it is being released, allowing much higher than the cost of generating new energy more energy to be extracted from the stored air from fuel, which means that batteries are generally than the energy required to compress it. Some have not appropriate for long-term energy storage. suggested using mines in Alaska for compressed air storage, but compressed air storage works best Batteries are more appropriate for providing short- at high pressures to maximize turbine performance. term energy storage to allow a transition between a Leak rates cannot exceed 1%. In near-surface mines, variable renewable energy source and a dispatchable porosity in rocks and fissures would likely allow too generator. This is the case in the wind-diesel power much air to leak; however, depleted natural gas wells system in Wales, or smaller applications, such as might provide storage for compressed air in areas home or small community systems, where the cost of the state where these wells occur, such as in the of dispatchable generators can be quite high. Since Cook Inlet basin. In most cases, current and planned batteries operate on direct current (DC), a power CAES systems are installed in conjunction with converter is also required to allow them to supply natural gas-fired power plants, where the compressed (and be charged by) alternating current (AC). There air is not used to generate electricity directly, but is are many types of batteries with different operating fed into the natural gas turbine to boot its efficiency. characteristics. Several battery types can be As with pumped hydro, CAES capacity and rated considered for rural applications. power are generally determined by geographical considerations. Power response is also good and, depending on the design, can at least in theory quickly switch from generation to excess energy consumption. Because the storage capacity is determined by the volume of compressed air, CAES technology has been considered for long-term storage. At this point a small-scale CAES system is not commercially available, due in part to the cost of high pressure and the small storage capacity. For this reason, CAES is not likely to be useful for small communities until large-scale, cheap storage solutions are found. 182
  • 183. Lead-acid batteries: There have been some diesel battery hybrid powerLead-acid batteries are the most common batteries. systems installed in the state, most notably at thePeople are accustomed to using them in vehicles. new visitor center in Denali Park. The dieselFor remote power systems people typically use deep generator charges the system at night and permitsdischarge batteries. These are inherently different visitors the experience of silence during the day.from car starter batteries in that they are designedto hold larger amounts of energy for longer periods. Other examples include a 1.4 MWhr systemAlthough batteries are highly reliable, they have installed in Metlakatla and a 2.25 MWhr systema limited life, are heavy to ship, and contain toxic installed at Chena Hot Springs in conjunction withmaterials that usually require removal at the end of their geothermal power plant. Both systems weretheir useful life. installed for load leveling to improve the quality of delivery, although the customer in Metlakatla whoThere are many different types of lead-acid batteries, spurred the installation shut down three months afterand they come in many sizes. There are also many the battery bank was brought online. That batterydifferent designs, each of which has different now supports the total Metlakatla load. It is chargedoperation and cost considerations, but also have almost exclusively by storage hydro, displacingdiffering life cycle performance. As a general diesel generation. The original battery cells haverule, the larger and heavier the batteries, the better reached the end of their life and are being replaced.they are for remote applications, as they typically In an additional project, a battery bank was installedhave higher amounts of lead (longer lasting active in Lime Village to store energy from its solar array.material) and more room for electrolyte. Lead- Unfortunately that system has experienced repeatedacid batteries have a moderate power density and failures, which is not encouraging for the installationgood response time. Depending on the power of batteries in rural Alaska.conversion technology incorporated, batteriescan go from accepting energy to supplyingenergy instantaneously. Lead-acid batteries arehighly impacted by temperature and must be wellmaintained to achieve maximum life expectancy. 183
  • 184. Ni-Cad Batteries: Flow batteries:Nickel-cadmium batteries (Ni-Cad) are an alternative Several battery technologies have been developedto lead-acid batteries. They are more robust, with during the past several decades that can be classifiedlonger life in stationary applications. Although Ni- as flow batteries. These batteries store energy inCad batteries are considerably more expensive than liquids that contain materials capable of storinglead-acid batteries, this longer life expectancy and electrons as compared to the electrochemicaltheir usefulness in high power applications might reactions that drive more traditional battery systems.make them less expensive on a life-cycle basis, Flow batteries act much like fuel cells, whereparticularly in rural Alaska where long operating life electrons are exchanged over a membrane, causingis beneficial. an electric current. The electrolyte is usually keptIn 2003, Golden Valley Electric Utility in Fairbanks in large tanks, and although the battery itself hasinstalled a Ni-Cad battery system capable of no moving parts, pumps are required to move theproviding 27 MW of power for 15 minutes. This electrolyte past the membrane. This fact allows theis long enough for the co-op to bring backup decoupling of power output and storage capacitygeneration online in the event of problems with the that is found in most other batteries: a flow batteryIntertie or power supplied from the Anchorage area. can be designed to provide a specific power outputGVEA’s system has been operating successfully (by determining the membrane surface area andsince installation and, as of mid-2008, has prevented electrolyte flow rate) and specific capacity (the size256 outages. A Ni-Cad battery bank was also of the electrolyte storage).installed as part of the high-penetration wind- The VRB (Vanadium Red-ox Battery) is one of thesediesel system in Wales to provide approximately 15 battery types, produced by VRB Storage Systemsminutes of community load. This allows the system (Canada). This technology is currently in the pre-to ride out small lulls in wind production when the commercial testing phase, with a small unit beingdiesel engines are not operating and start a diesel tested at UAF for the past two and a half years andengine if the lull is extended. Ni-Cad batteries are at several dozen installations around the globe.not as susceptible to temperature fluctuations, have Several flow batteries have been implemented ingood power density, very quick response time, and remote applications, most notably in a wind-dieseldischarge consistently, making them appropriate for application on King Island off the coast of in wind-diesel applications. Kotzebue Electric Company was also interested in purchasing a battery of this kind to operate in conjunction with its wind farm. Unfortunately, VRB Storage Systems recently went out of business due to lack of funding.184
  • 185. Other battery types:Other flow batteries include sodium bromine and Many other battery types have been investigatedzinc bromine systems. These share most of the for use in remote applications, but their powersame basic properties and also remain in the pre- density, response time, and cost have not madecommercial stage. Flow batteries usually have low them economical when compared to the three typespower density, meaning it takes a lot of fluid to described above. Increased market focus on high-provide any significant capacity. They have long quality, lightweight, inexpensive, and high-power-system lives, at least theoretically. Pumps and power density batteries for the electric and hybrid carelectronics are the typical weak links. Most flow markets will result in new battery types that holdbatteries also have fast response times and can be promise for remote applications in the coming years.sized to meet a specific need.Depending on the electrolyte type, flow batteriesmust be kept at a relatively constant temperature.The low self-discharge rate and ability to decouplepower and capacity would allow flow batteries to beused for longer, multi-day, or even seasonal storage. Photo below: This flow battery is a 10kW VRB battery undergoing testing at the Alaska Cen- ter for Energy and Power. 185
  • 186. FlywheelsA flywheel is a device that stores kinetic energy in a There have been catastrophic failures fromrotational mass. Flywheels are not new technology, overloaded flywheels; however, these are typicallybut modern materials and other innovations are in research settings. Although recent developmentsspurring research on making flywheel systems such as magnetic bearings have reduced losses,that are smaller, lighter and cheaper, with greater flywheels have a parasitic energy loss to keep thecapacity. unit spinning and a relatively quick self discharge if additional energy is not provided.Flywheels have been used in applicationsincluding energy storage such as uninterruptable PowerCorp (Australia) has successfully integratedpower supplies, grid conditioners for high-cost its flywheel system with wind systems and wind-manufacturing, and even vehicle powering. (The diesel hybrid projects, and for grid stability typicallygyrobuses used in Sweden in the 1950s were in mining applications. The use of flywheels haspowered by flywheels.) allowed wind-diesel systems to operate at reportedly high penetrations (as high as 90%) of wind powerFlywheels have storage characteristics comparable to to offset diesel generation. In this scenario thebatteries in that their capacity is generally fixed but flywheel, which ranges in size from 250 kW to 1the capacity can be drawn down quickly or slowly MW, acts as a spinning reserve and can providedepending on need. Often flywheels are used in frequency and voltage control.remote applications to smooth out power fluctuationsand allow the starting of a dispatchable generatorwhen necessary. As compared to batteries, typicalstorage times at rated power in the order of minutesare expected. Flywheels, however, have severaladvantages. They have long cycle life, requireminimum maintenance, and have fast responsetime. Although the limit of strength of the materialused for the spinning rotor places upper limits onspeed and thus capacity, most commercial flywheelsare modular. Both capacity and rated power can beincreased by using multiple units.186
  • 187. Capacitors HydrogenA conventional capacitor is a passive electrical The use of hydrogen as a power system storagecomponent that can store energy. Capacitors are medium has received a great deal of attention in thecommonly used in personal electronic devices to last few years. Several remote wind-PV-hydrogenstore energy to maintain the power supply while systems have been installed, where excess energy isbatteries are being changed. Capacitors have no converted into hydrogen using an electrolyzer andmoving parts, thus a very high cycle life, fast and stored as a compressed gas. This stored energy isconsistent response, but low power density. This then either burned in a modified internal combustionmeans that large capacitor arrays are required to engine or run through a fuel cell when renewablestore meaningful amounts of energy. Conventional energy is insufficient to cover the load. Hydrogenfoil-wrapped capacitors are used extensively on systems are expensive because of the high qualityelectric grids today to provide voltage support. hydrogen needed for most fuel cell applications, andWhile maintaining a very high cycle life (>100,000 the cost of suitable storage tanks. They have verycycles), electrochemical capacitors, also known as low round trip efficiencies, typically around 30%.ultracapacitors and supercapacitors, are able to store As with flow batteries, the rated power and storagesignificantly more energy than conventional ones, capacity can be decoupled, with the fuel cell drivingbut less energy than pure batteries. Capacitors have a the rated power and the hydrogen tank size drivinghigher power capability than batteries, but they store available capacity. When compressed gas is used,much less energy. Both capacitors and batteries are power density is usually good, but hydrogen systemssystems with multiple components and high capital do not typically have good response times. Theycosts; however, capacitors and batteries can be are sometimes installed with a small battery bank todistributed throughout the system and do not require smooth out power fluctuations. Due to the abilityany specific geology. Capacitors are also expensive, to store hydrogen in external tanks, it is typicallyand currently there are no commercial manufacturers considered as a multi-day storage medium, althoughof large-scale capacitor storage systems. the high cost of current storage capacity limits hydrogen’s use for longer storage times. At present the use of hydrogen storage has been primarily in technology demonstrations or experimental systems. Due to its cost, hydrogen is not economically viable given the current state of the technology. As costs come down, as component efficiency increases, and as lower cost storage media are introduced, hydrogen may become a more viable storage medium for remote power systems. 187
  • 188. ReferencesAustralia Department of Primary Industries and Energy, Lundsager, P.; Manwell, J.; Ruddell, A.; Svoboda, V.1993. Rural and Remote Area Power Supplies for (2005). Life Prediction of Batteries for Selecting theAustralia. Technically Most Suitable and Cost Effective Battery. Journal of Power Sources. Vol. 144, 2005; pp. 373-384;Baring-Gould, E. I.; Wenzl, H.; Kaiser, R.; Wilmot, N.; NREL Report No. JA-500-38794.Mattera, F.; Tselepis, S.; Nieuwenhout, F.; Rodrigues, C.;Perujo, A.; Ruddell, A.; Lindsager, P.; Bindner, H.; Wenzl H., Baring-Gould I., Kaiser R., Liaw B.Y.,Cronin, T.; Svoboda, V.; Manwell, J. (2005). Detailed Lundsager P., Manwell J., Ruddell A., Svoboda V.,Evaluation of Renewable Energy Power System Operation: (2004) Life Prediction OF BatterIES For Selecting theA Summary of the European Union Hybrid Power System technically most suitable and cost effective battery,Component Benchmarking Project; Preprint. 24 pp.; NREL Proceedings of the 9th European Lead Battery Conference,Report No. CP-500-38209. 9ELBC, Berlin, Sept, 2004 and Journal of Power Sources.publications/Bindner, H.; Cronin, T.; Lundsager, P.; Manwell, Web-based resourcesJ.; Abdulwahid, U.; Baring-Gould E.I. (2005), Deliverable4.1: Lifetime Modelling, European Union Benchmarking Project on componentsPublications/Deliverables for Renewable Energy Systems: www.benchmarkingeu.orgCorbus, D.; Newcomb, C.; Baring-Gould, E. I.; Friedly, RESDAS: Renewable Energy Systems Design AssistantS. (2002). Battery Voltage Stability Effects on Small Wind for Storage: Energy Capture: Preprint. 12 pp.; NREL ReportNo. CP-500-32511., T.R.. Small Batteries, John Wiley & Sons, NewYork. 1982Desmettre D., Mattera F., Malbranche P. and Métais S.(2000), Publishable Final Report of project “Qualibat,Investigations for a QUicker Assessment of Lifetime andother key characteristics of photovotlaic BATteries”,GENEC, CEA Cadarache, F-13108 St. Paul-lez-Durance,FranceHunter, R., & Elliot, G. (1994)., “Wind Diesel Systems”,Cambridge University Press, Cambridge, UK.,1994.Perez, R.A. (1995). The Complete Battery Book, Firstedition, Tab Books, Blue Ridge Summit, PA.Ruddell A. (2004), Deliverable D3.2 of the Benchmarkingproject, Definition of test procedures for batteries usedin different categories, /Publications.htmWenzl, H.; Baring-Gould, I.; Kaiser, R.; Liaw, B. Y.; 188
  • 189. 189
  • 190. In-Stream Hydrokinetic Energy Technologies (In-River, Tidal, and Ocean Current)AEA Program Manager: David Lockard (771-3062) Alaska’s first in-stream hydrokinetic turbine, located in Ruby. TECHNOLOGY SNAPSHOT: HYDROKINETICInstalled Capacity (Worldwide) 1500 kW worldwide, all demonstration projectsInstalled Capacity (Alaska) 0 kW installed Potentially available to communities in all regions of Alaska located nearResource Distribution a major waterway or tidal basin, excluding the North SlopeNumber of communities impacted Not assessed yetTechnology Readiness Pre-commercial to early commercial Impacts on local hydrology and aquatic species must be assessed on aEnvironmental Impact case by case basis. AEA anticipates that these impacts can be minimized by appropriate siting, design and operation. A 2008 EPRI study calculates paybacks in the 3-9 year range for threeEconomic Status proposed hydrokinetic sites in Alaska, however this has not been verified by a commercial installation.190
  • 191. IntroductionH ydrokinetic devices are powered by movingwater and are different from traditional hydropower inland communities in Alaska are situated along navigable waterways that could host hydrokineticturbines in that they are placed directly in a river, installations, and Alaska, with 90% of the total U.S.ocean or tidal current. They generate power only tidal energy resource, is home to some of the bestfrom the kinetic energy of moving water (current). tidal energy resources in the world.This power is a function of the density of the waterand the speed of the current cubed. The available While there are obvious opportunities, there are alsohydrokinetic power depends on the speed of the significant environmental and technical challengesriver, ocean, or tidal current. In contrast, traditional related to the deployment of hydrokinetic deviceshydropower uses a dam in Alaska’s rivers andor diversion structure to Some challenges facing hydrokinetic device tidal passages. Somesupply a combination deployment of these are commonof hydraulic head to installations in • Environmental concerns, especially with regardand water volume to any location. Other to impacts on fish must be addressed. Fisherya turbine to generate concerns are more resources in Alaska have unparalleled value forpower. In order to subsistence, sport, and commercial use. It is critical specific to Alaskanoperate, hydrokinetic that hydrokinetic energy development be fully waters.devices require a evaluated for impacts on these resources.minimum current and • Survivability and performance issues must be As of 2008,water depth. The examined. Alaskan waters have many hazards hydrokinetic devicesminimum current for hydrokinetic devices, including high rates of are considered pre-required to operate a sediment transfer in river beds, debris, and ice. commercial. Thehydrokinetic device These issues also complicate the design of anchoring Yukon River Inter-is typically 2-4 knots. and cabling systems. Tribal Watershed • Resource assessment is necessary. There is aOptimum currents Council installed a shortage of river velocity and depth data, particularlyare in the 5-7 knot 5 kW New Energy for winter months.range. Water depth • Effects on navigation are important. Many of the Encurrent turbine inis an important factor fast flowing rivers in Alaska with potential for the Yukon River at thein the total energy hydrokinetic development are also major waterways community of Ruby forthat can be extracted for barge delivery of bulk materials to isolated one month in 2008. Afrom a site, since rotor communities. A major consideration is that these 100 kW UEK turbine isdiameter is dependent devices not impede river traffic. planned for installationon adequate water level in the Yukon River atabove the installed Eagle in 2009. Thedevice. Hydrokinetic devices are ideally installed New Energy EnCurrent machine, in 5 and 10 kWin locations with relatively steady flow throughout size, is available for purchase from ABS Alaskathe year, locations not prone to serious flood events, in Fairbanks, and New Energy Corporation isturbulence, or extended periods of low water level. developing 25kW, 125kW, and 250kW devices as well. This technology is still being refined forAlaska has significant potential for hydrokinetic Alaskan applications. Its performance is unproven.development in both rivers and tidal basins. Most 191
  • 192. Hydrokinetic Technology OverviewH ydrokinetic devices typically use verticalor horizontal axis turbines similar to those Ocean Currentdeveloped for wind generation; however, Energy Storage section for more information).because water is approximately 850 times denserthan air, the amount of energy generated by a An ocean current is a continuous, directed flow ofhydrokinetic device is much greater than that ocean water that can run for thousands of miles.produced by a wind turbine of equal diameter. In Surface ocean currents (restricted to the upper 1000addition, river and tidal flow do not fluctuate as ft or so) are largely wind driven, while deep oceandramatically from moment to moment as wind currents are driven by density and temperaturedoes. This predictability benefit is particularly gradients. Unlike tidal currents, which changetrue for tidal energy. It can be predicted years in direction and flow rate, ocean currents are relativelyadvance and is not affected by precipitation or constant and flow in one direction only. In Alaska,evapo-transpiration. the Aleutian passages have been identified as an area for potential development of ocean current energyIn Alaska’s riverine environments, water flow extraction.fluctuates, often dramatically, on a seasonalbasis. Snowmelt from glaciers and seasonal The type of turbine to be installed on an oceansnow accumulation contributes significantly to current resource is similar to a tidal or in-riverthe total water volume in Alaska’s waterways. hydrokinetic one. As of late 2008, there are noGenerally, flow rates are the highest during commercial ocean current turbines in operation;spring snowmelt, but this higher flow is however, several companies are exploring optionsassociated with significant debris flowing within for ocean-current energy extraction.the water channel. Debris is often directed tothe fastest area of flow (the thalwag) and isnot necessarily confined to the surface. In thewinter, river flow often drops off dramaticallyand is largely supplied by local groundwater.This fact coupled with challenges associatedwith ice/turbine interactions leaves open toquestion whether hydrokinetic devices wouldbe cost effective during winter months in mostAlaskan rivers. If hydrokinetic devices are onlydeployed seasonally in riverine environments,an imbalance between resource availability andelectricity demand (which is often highest in thewinter months) will result.It is possible that in dealing with resource andload fluctuations on short time periods, energystorage could be utilized or excess energy couldbe dissipated for heating purposes (see the
  • 193. T Project Information o put together a hydrokinetic project, the exact Equipment can be readily purchased to measureconditions of the project site must be determined. local streamflow, however processing dataThis process includes collecting information on river requires some expertise. Alternatively, thereflow, depths, and fish data. Some of this data can be are several companies that can conduct localobtained from public sources. resource assessments for both tidal and in-stream applications, as well as complete a bathymetricMapping Streamflow and Depths: Federal agencies map of the floor of the water body (river or tidalincluding the USGS, the EPA, and the U.S. Army basin). This is useful not just in determiningCorps of Engineers maintain detailed historic water depth, but also in predicting how the flowprecipitation and runoff databases that are useful in through the channel might change over time, dueproject planning. In particular, the USGS has daily to silting and/or flood events. It is important tostreamflow statistics for 485 sites around Alaska. remember that installing a hydrokinetic deviceThis information can be found on their website at will in itself change the flow of a river and result in sediment deposition over the course of time.Unfortunately, the gauging stations where thesedata are collected are often widely distributed, Since they are relatively consistent andparticularly in rural areas of the state. Additionally, predictable from year to year, obtaining data onbecause the amount of power that can be generated current flow for tidal energy resources is easieris a function of the cube of the velocity of the water: than for river environments. Basic data onPower(kW) = k(velocity)3 where k=constant, the Alaska’s tidal energy resources can be obtainedexact location of a hydrokinetic device within the from the EPRI reports, ‘Knik Arm Tidal Energywater column will have a large impact on how much Report’ and ‘Southeast Alaska Tidal Energypower is ultimately generated. It is recommended Study.’ In addition, there are data available fromthat local measurements of depth and water flow be the Alaska Energy Authority on tidal energyobtained. resources in the Aleutians, Kodiak, Dillingham, and Bethel.The best tool for measuring river or tidal flow in aspecific location over time is the Acoustic DopplerCurrent Profiler (ADCP), which maps velocities atall depths through the water column. ADCPs areoften deployed from a survey boat or barge. Thetiming of these surveys is important, and long-termdata create a more accurate picture of the totalpotential. However, data collected by an ADCPcan be adjusted using daily historical averages andextremes. This greatly reduces the time required todetermine optimal locations. 193
  • 194. Project Information Environmental Assessment: Directly or indirectly, any river or tidal turbine installation has the possibility of impacting fish, marine mammals, seabirds, and benthic fauna; however, these impacts are largely unknown. Direct impacts to aquatic organisms are primarily the result of contact with structures (such as turbines) placed in the immediate habitat. Such impacts may result in injury or mortality. Indirect impacts can include species displacement due to modified environmental factors that change migratory patterns such as a modified tidal stream that is relied upon for migration in and out of a bay or estuary. One significant concern is potential impacts to Alaska’s fish, particularly salmon. It is generally thought that hydrokinetic devices will have limited impact on adult species migrating upriver to spawn. They tend to favor slow water along banks rather than fast currents where hydrokinetic devices would be sited, and they would be better able to maneuver around an upstream diversion, which they could sense from turbulence and pressure changes. There is potential to affect outmigrating smolts. They tend to prefer the faster flowing waters where devices would be placed, and they would have less time to react to turbulence or pressure changes. In any case, environmental impacts will be site specific. Until more information is gathered, a site specific environmental survey should be conducted at any location considering hydrokinetic power generation. The Alaska Department of Fish and Game conducts fish monitoring programs throughout the State, and there are several private companies that conduct surveys. 194
  • 195. Potential Reduction in Cost of Energy of a horizontal axis turbine mounted on a pontoon platform. Based on that design, a performance, cost, and economic model using a simple payback period (SPP) was developed. This model can be extrapolated to various sites of interest around the state. As is true with many technologies, the commercial scale economics are limited for rural Alaska, and small projects will yield higher costs per installed kilowatt. Nonetheless, EPRI calculated a simple payback period of 3 to 5 years for the isolated grid communities of Iguigig and Eagle. This is based on a system-level preliminary design of a plant anchored to the river floor (see Case Study #1), with two sets of two counter-rotating, 4.5 ft diameter rotors and a generator mounted on the rotor axis. The installed cost per kW of generation capacity is estimated at $7,500 for the 40 kW-rated plant at Iguigig and $5,800 for the 60 kW-rated plant at Eagle. The single 5 kW Encurrent project at Ruby was installed for $16,000 per installed kW. While installation costs are high even in comparison to other renewable energy systems,A t this time there is minimal if any third partytesting and verification of devices. Cost information they are not unexpected given the current level of development. In addition to capital costs, the economics of a project are also tiedis based largely on claims from manufacturers, who to other project costs including operationtypically underestimate project expenses in the early and maintenance (O&M), insurance costs,stages of development. In fact, the turbine deployed and permitting, design, and environmentalby the Yukon River Inter-Tribal Watershed Council monitoring costs. These could be substantial,at Ruby in 2008 was the first hydrokinetic device to especially for early generation connected to a grid anywhere in the United States EPRI also states that initial project costs used inin a river location. The first tidal current devices, their analysis contain a margin of error of up tosix 34kW turbines, were installed in the East River 30%, and operating and maintenance costs haveof New York City in late 2006. There is more cost a margin of error as high as 80%. This coulddata available for tidal hydrokinetic applications dramatically impact the simple payback periodinstalled in the northeastern United States, but to and likely will vary from site to these have all been demonstration projects andnot permanent installations. Nonetheless, the results are compelling and indicate that, if barriers to development of theIn order to assess performance and economics of technology are overcome, hydrokinetic deviceshydrokinetic devices in river locations, the Electric could result in a real reduction in electricalPower Research Institute (EPRI) has established a generation costs in remote Alaskan communitiesbaseline design for a hydrokinetic device consisting with an appropriate resource.
  • 196. Manufacturer OptionsThe following list includes developers who have, at a minimum, built an in-stream prototype hydrokineticdevice: Manufacturer Location Device Name Website BioPower Australia bioStreamTM Blue Energy Canada Davis Turbine Bourne Energy Malibu, CA Riverstar Clean Current Canada Clean Current Turbine Submersible Power Current to Current Burlington MA Generator Free Flow Power Manchester, MA Hammerfest Strom Norway Hammerfest Strom Turbine Hydro Green Houston, TX HydroGreen Turbine Energy Lucid Energy Goshen IN Lucid Energy Turbine Lunar Energy Ltd United Kingdom RTT Marine Current United Kingdom Seaflow SeaGen www.marine Turbines Ltd, Natural Current Vertical Axis Natural Currents Highland NY Turbine Neptune United Kingdom Renewables Oceana Washington DC Ocean Flow United Kingdom EvapodTM Energy Open Hydro Ireland Open Center Turbine (OCT) Ocean Renewable Fall River, MA OCGenTM Power Pulse Generation United Kingdom Pulse Generation Ponte di Italy Enemar Archimeda Seapower Int’l AB Sweden EXIM TM Sea Snail United Kingdom Sea Snail Scots Renewables United Kingdom SRTT SMD Hydrovision United Kingdom TidEl 196
  • 197. Manufacturer Location Device Name Website Startkraft Norway Statkraqft Swan Turbines United Kingdom Swan Turbine Generation United Kingdom Tidal Generation Turbine Limited Tidal Hydraulic GeneratorTidal Hydraulic United Kingdom (THG) Tidal Sails Norway Tidal Sail Tidal Stream United Kingdom Tidal Stream Device Annapolis, UEK Underwater Electric Kite Maryland Verdant Power Arlington, VA Kinetic Hydro Power System Vortex Hydro Ypsilanti, MI Vivaci Energy 48197, USA Woodshed Australia Tidal DelayTM Technologies 197
  • 198. Current Activity in AlaskaTidal Energy Cook Inlet has some of the highest tidal ranges in the world and has been the subject of several studies. Ocean Renewable Power Company (ORPC) has received a preliminary Cook Inlet FERC permit for its proposed tidal energy project site at Knik Arm, adjacent to Anchorage. ORPC plans to deploy a pilot project at Knik Arm in 2011. Yakutat The community of Yakutat is considering tidal energy. The City of Homer and the communities of Port Graham and Seldovia are investigating the Homer potential for tidal energy development in Kachemak Bay. Dillingham The Bristol Bay campus is assessing resource potential in Nushagak Bay.In-river ORPC is planning the installation of a 50 kW turbine in 2009. Nenana The community of Whitestone on the Tanana River near Delta Junction is interested in in- Whitestone river hydro and has been the subject of an EPRI study. Igiugig is a small community in southwestern Alaska that may be ideally suited to Igiugig hydrokinetic power. It is the subject of one of the case studies in this chapter. The Yukon River at Ruby is the location of the first hydrokinetic installation in Alaska, the 5kW Encurrent turbine installed by the Yukon River Inter-Tribal Watershed Council. The Ruby YRITWC is considering deploying a larger 25 kW unit in 2010. AP&T has been planning the installation of a 100` kW UEK turbine for several years. Eagle Planned deployment is scheduled for 2009.The Alaska Center for Energy and Power (ACEP) at the University of Alaska is seeking funding for the development of aHydrokinetic Test Center in partnership with the University of Maine and Maine Maritime Academy (both active in tidal energyresearch). The proposed Center would work with communities and industry to develop protocols, standards, and best practices inenvironmental and resource assessment of tidal and in-river sites through the permitting process. The center would also work onmodeling and performance testing of devices. 198
  • 199. Case Study #1: Igiugig In-River Hydrokinetic Site (from EPRI study)I giugig, located 48 miles southwest of Iliamnaand 56 miles northeast of King Salmon, is a small a multifunction relay, and a real-time SCADA monitoring system.village with a year-round population of 56. Igiugig Project costs in 2007 dollars were assessed throughsits at the headwaters of the Kvichak River, which a model using historical quotes and existing projectsdrains out of Lake Iliamna. Because it is located in related technology fields. The capital cost fordownriver from Lake Iliamna, Igiugig has much less the 40 kW installation was estimated at $300,000,summer/winter variability in flow. This location with annual O&M at $12,000 per year. Total annualalso results in a reduction in silt loads compared to energy production was estimated at 200,000 kWhrivers that are directly glacier fed. The Kvichak is (24 kW average, or 60% capacity factor). This wasice free all winter at Igiugig, although ice does pose assuming the installation matched summer loads fora concern for two weeks in the spring, as breakup Igiugug. The simple payback period was estimatedoccurs on Lake Iliamna. These factors make Igiugig to be three to four years under this scenario. Aan excellent candidate for hydrokinetic power second scenario was considered in which the projectgeneration. provided baseload power to the village (325,000 kWhrs, 36 kW on average, or 90% capacity factor).EPRI has considered a hypothetical 40 kW project This increased the capital and O&M costs for themounted on a 30-ft pontoon boat anchored to the project accordingly, but resulted in a similar paybackriverbed. The pontoon was designed to serve as a period. Both scenarios were based on an avoidedplatform from which four turbine rotors, 4.5 ft in fuel cost of 65¢ per kW, which is the fuel portion ofdiameter, could be suspended in the water column. the current power cost.A protective ‘trash-rack’ was mounted in front ofthe rotors and generator to minimize debris impacts. Additional information on this hypotheticalThree of these pontoons, with a total of twelve installation can be found in the EPRI report, ‘Systemdevices, were considered for this case study. Level Design, Performance, Cost and Economic Assessment – Alaska River In-Stream Power Plants.’The 40 kW size of the project was based on villageenergy consumption (low) and resource availability(high) during summer months. The villagecurrently has three diesel generators ranging in sizefrom 60kW to 100 kW. Historic loads are 40 kW(summer) to 95 kW (December-February). Thecost of power in the community is 98¢ per kWh andincludes fuel and non-fuel costs.Grid interconnection would be accomplished usinga short (~225 ft) underwater cable from the unitsto the shore and connecting to the local grid via anexisting distribution line. Other project componentsinclude a dedicated transformer, revenue metering,a disconnect device, a circuit interrupting device, 199
  • 200. Case Study #2: Cairn Point at Knik Arm Tidal Energy Site (from EPRI study)C airn Point is potentially a good location for in-stream tidal power generation, as strong tidal currents Site-specific surveys of water flow and geotechnical conditions will be required. The proposed installationsoccur four times a day, and it is adjacent to significant could be accomplished from a derrick barge thatelectrical infrastructure at Elmendorf AFB and would also be used to install monopile foundationsAnchorage. Cairn Point is located about two miles and a remote-operated vehicle (ROV). The ROVnorth of Anchorage in Knik Arm, in upper Cook Inlet. is used to monitor subsea operations, provide visualAt Cairn Point, water depths exceed 150 ft, and the inspections, and carry out tasks such as connectingflow through Knik Arm is constricted. The constricted and disconnecting guide wires and electrical cables.flow, along with Cook Inlet’s large twice-daily tidal The ROV can reduce cost and increase safety byrange, combine to produce high water velocities. eliminating the need to use divers in high currentTidal currents average 2.0 knots with peaks of up to conditions.7.5 knots. They are some of the strongest currents inCook Inlet. The 17 MW size of the project was based on restricting power extraction to about 15% of the totalChallenges to successful deployment of an in-stream available power to minimize degradation of the marineenergy device at this site include seasonal ice, a high environment. If more of the resource can be extractedlevel of sedimentation in the water, a shifting seabed without degradation to the environment, then energy(scour), and also concern about impacts to marine costs could decrease. Grid interconnection would bemammals, particularly to the local population of through a subsea cable (approximately 3000 ft long)Beluga whales. Due to the presence of seasonal pack to a shore-based substation, then to Elmendorf AFB’sice, including both submerged and surface frazil ice as electric grid for transmission to Anchorage Municipalwell as large blocks of beach ice (mixed sediment and Light and, the support structure for turbines and the turbineprofile must be completely submerged. Access to the Cost estimates in 2005 dollars are $110 millionturbine site for maintenance will likely not be possible for the capital costs (not including a $3.25 millionfrom about November until breakup in March. transmission upgrade), with an annual O&M cost of $4.1 million. This translates into nominal levelizedThe EPRI system feasibility study considered two costs of electricity of about 10.8¢/kWh for utilitytypes of in-stream energy generation devices, the generation, and 8.4¢/kWh for municipal generation.Lunar (RTT) and the Marine Current Turbine (MCT), This assumes energy incentives equal to those that theinstalled in arrays that would produced an average of government provides for wind energy technology.17 MW of power with little environmental impact. At this point, Ocean Renewable Power Corporation17 MW is the equivalent power used by about 12,000 has secured a FERC preliminary permit for the Cairnhomes, each using 1.3 kW. The array layout is Point area. ORPC plans to install its own Oceandetermined by spacing rules designed to reduce cyclic Current Generator (OCGen™) module consistingblade stresses from seabed boundary layer effects, of four Turbine Generator Units (TGUs), each withto prevent ice impacts, and to prevent lateral and 4 Advanced Design Cross Flow (ADCF) turbinesdownstream interaction between rotors. mounted to a permanent magnet generator on a single shaft.The size and depth of a monopile into the seabedare determined by current and seabed properties. The system will be moored to the bottom with anchors and weights rather than pilings. It will be located at 200
  • 201. least 40 feet beneath the surface of the water to avoidconflicts with marine vessels, ice, and debris. ORPCplans to install a 1 MW pilot project in 2011, to increaseto 5 MW after a year of testing and monitoring, and toincrease to a final project size commensurate with theresource and energy market for the long term.Additional information for the tidal in-stream powergeneration concept installation for Cairn Point canbe found in the EPRI report, ‘System Level Design,Performance, Cost and Economic Assessment – KnikArm Alaska Tidal In-Stream Power Plant’.T he hydrokinetic working group agreed thatcommercial projects will likely be operating in thestate in the next three to five years. The group wasnot ready to make specific recommendations forhydrokinetic projects for specific villages in Alaska.Recommendations from the working group are lessproject specific. They are tipped toward findingappropriate ways to move forward with this technology.The members of the working group stressed that itssuccess is tied to not overestimating the maturity level 201
  • 202. Hydrokinetic Working GroupRecommendationsof the technology by skipping over beta testing and demonstration phases.H ydrokinetic energy represents a real opportunity for power generation using local resources at selectlocations in Alaska; however, there are still numerous environmental and technical challenges associated withthis technology. For example, there are concerns related to interactions between turbines and both adult andjuvenile fish, since most communities with hydrokinetic resources are heavily dependent on local subsistenceand commercial fisheries. Additional concerns include ice interaction with infrastructure, silt abrasion, Specific recommendations that came out of the working group include: • Develop guidelines and protocols on how to initiate projects. • Develop methods to prioritize potential projects. • Conduct additional site-specific resource assessment in Alaska, including screening of locations with a list of compatibility factors, to determine optimal sites. This is necessary for project development and does not commit the state to failure by deploying technology too soon. • Quantify and streamline permitting requirements, and draft a recommendation to have the state review FERC licenses. Encourage communities to protect their own interests by applying for site permits near their locations. • Conduct more research as needed in terms of impacts on fish populations. • Involve the University of Alaska as an independent source for device testing. • Support demonstration and pilot scale projects to come up with defensible numbers (projections) for future project costs. Get data on how devices are working and how manufacturers can improve and modify devices. Optimize technology for Alaskan environments. • Support development of a coordinated national research program to avoid multiple small failures in disparate locations. Position Alaska (possibly through the University) to take a leading role. Such a test center could also serve to promote cross- fertilization and standardization of ancillary equipment, such as development of a universal platform for installation of turbines, including a deployment strategy. 202
  • 203. Conclusionsubmerged debris which could damage turbines,navigation hazards, and impacts on marine life.The actual construction and operation of a pilotdevice or devices will result in a more completeunderstanding of technical, environmental, and costfactors associated with hydrokinetic energy. Thiswould provide a solid starting point for additionalcost and economic analysis for specific sites aroundthe state.ReferencesPolagye, B. and M. Previsic (2006) System LevelDesign, Performance, Cost and Economic Assessment– Knik Arm Alaska Tidal In-Stream Power Plant. EPRI –TP – 006 AK, 126 pp.Previsic, M, Polayge, B and Bedard R, (2008) SystemLevel Design, Performance, Cost and EconomicAssessment – Alaska In-Stream River Power Plants EPRIRP-006-AK 99 pagesEPRI Primer on Power from Ocean Waves and TidesTechnology White Paper on Ocean Current EnergyPotential on the U.S. Outer Continental Shelf, U.S.Department of the Interior 203
  • 204. Ocean Wave Energy TechnologiesAEA Program Manager: David Lockard (771-3062) TECHNOLOGY SNAPSHOT: WAVE POWER Over 3000 kW worldwide, most are demonstration projects. A commercial multi-unit 2.25 MW capacityInstalled Capacity (Worldwide) commercial wave farm was commissioned offshore of Aguçadoura, Portugal in the summer of 2008 0 kW installed. Estimated recoverable resource of aboutInstalled Capacity (Alaska) 150 TWh/yr in southern Alaska (assuming 15% recovery at 80% generation efficiency) Potentially available to communities in regions of Alaska located near an ice-free ocean and exposed to longResource Distribution fetches. The potential for wave energy development in protected waterways, such as those found in SE Alaska, or under winter ice is limited.Number of communities impacted Not assessed yet Pre-commercial to early commercial with an earlyTechnology Readiness commercial site of over 2 MW installed with a follow-on second stage of about 20 MW in development Impacts on local hydrology and aquatic species must be assessed on a case-by-case basis. EPRI anticipates thatEnvironmental Impact these impacts can be minimized by appropriate siting, design and operation. A 2007 assessment of energy costs for conceptual wave power projects in North America ranges from about 10— 39 ¢/kWh with the potential to decrease to about 4¢/kWhEconomic Status with installed capacities of 40 MW or more (consistent with price trends seen for wind energy) [Bedard et al., 2007]204
  • 205. IntroductionT he wind acting on the ocean’s surface generateswaves. They can travel for thousands of miles with Worldwide as of 2007, ocean wave energy devices are considered pre-commercial to early commercial.little loss of energy until they near a shore where Design, performance, and economic assessmentsthey begin to interact with the seafloor at depths of have been made by EPRI for sites in Hawaii,about 600 ft. Ocean waves consist of water particles Oregon, California, Massachusetts, and Maine. Tothat move in an orbiting pattern. Most (95%) of the date there has been no examination of wave energywave energy occurs between the surface and a depth project design for Alaska, although the City ofequal to one quarter of the wavelength. Yakutat contracted with EPRI in the fall of 2008 to perform a wave energy feasibility study. TheAlaska has significant potential (estimated at about only deployed wave energy project in the United60% of the total U.S. potential) for ocean wave States is a 40 kW buoy (PowerBuoyTM) for a Navyenergy development in offshore ocean basins near – Ocean Power Technology project in Hawaii. Ancoastal communities. initial, commercial wave energy wave farm with 2.25 MW capacity has been developed 5 km off theThere are obvious opportunities, but also significant coastline of northern Portugal near Aguçadoura withenvironmental and technical challenges related to plans to further expand the farm to 20 MW (www.the deployment of ocean wave energy devices in’s ocean basins. Some of these are common toinstallations in any location, and other concerns aremore specific to Alaskan waters. Some challenegs to Alaskan waters include: • Environmental concerns – especially with regard to impacts on fish and marine mammals. • Survivability and performance – Alaskan ocean basins have many potential hazards for ocean wave energy devices, including intense storms, high ocean current, debris, and ice (atmospheric, pack, and frazil). These issues also complicate the design of anchoring and cabling systems. • Resource assessment – there is a shortage of site-specific wave energy information. • Effects on navigation – ship and barge delivery of bulk materials to both major and isolated coastal communities is common in Alaskan waters, so a major consideration is that these devices not impede marine traffic. • Lack of transmission infrastucture and large electrical loads adjacent to the wave resources. 205
  • 206. Ocean Wave Energy Technology OverviewO cean waves contain energy both throughwater motion (kinetic energy) and due to the Monthly averages can be used to estimate seasonal variations in wave energy, which are maximum inelevation of water as the waves crest (potential winter. Wave forecast models can approximatelyenergy). On average, the potential and kinetic predict wave energy from one to three days inenergies in a wave are equal, while the energy advance. Both the kinetic and potential energy offluctuation is a function of the square of the waves are utilized in the range of ocean wave energywave height, the distance between waves, and conversion devices being developed or deployed.the wave period. Wave energy fluctuates daily These devices either transfer water motion intoand seasonally, depending on when and where mechanical action or use the wave height to create astorms occur to generate deepwater ocean waves. potential energy head across a generator.
  • 207. T o put together an ocean wave energy project, Project Informationexact conditions of the site need to be determined.This information includes daily and monthly waveheights and periods, extreme wave events, iceconditions, wind and ocean currents, depths, fishdata, and commercial and navigational uses. Someof this data can be obtained from public sources.Information about Alaska coastal ocean basinconditions and characteristics can be obtained fromthe Alaska Ocean Observing System (, NOAA, and Coast Guard buoys among othersources.Installation and operation of a wave power facilitywill affect the near-by environment, and it has thepossibility of impacting fish, marine mammals,seabirds, and benthic fauna directly or indirectly.Other environmental effects may include thewithdrawal of wave energy, atmospheric andoceanic emissions, visual appearance, conflicts withother uses, and installation and decommissioningof facilities. There is no actual environmentaleffects data available as of 2008 for Alaska oranywhere in the United States. Some studies arebeing conducted in Europe to examine potentialenvironmental impacts of wave energy. 207
  • 208. Manufacturer OptionsT he following list includes developers who have, at a minimum, built a wave energy conversion prototypedevice: Manufacturer Location Device Name Website Finavera Renewables Canada AquaBuOy Oceanlinx Australia Offshore OWC Pneumatic Stabilized San Diego, CA Float Platform Hydam Ireland McCabe Wave Pump Independent Natural Minnesota SEADOG – water pump Resources Pelamis Wave Power United Kingdom Pelamis Ocean Power Technologies Pennignton, NJ PowerBuoy Ocean Wave Energy Ocean Wave Energy Bristol, Road Island Company Converter Ocenergy Norwalk, CT Wave Pump OreCon Ltd United Kingdom MRC1000 Floating Wave Power SeaPower Group Sweden Vessel Teamwork Tech Netherlands Archimedes Wave Swing Wve Dragon ApS Denmark Wave Dragon WaveBob Ltd Ireland Wavebob Coastal and Offshore WaveGen United Kingdom OWC AW-Energy Oy Finland WaveRoller 208
  • 209. Potential reduction in cost of energy Conclusion E PRI estimates of the cost of energy (COE) for O cean wave energy could represent a real opportunity for select coastal locations in Alaska; the first commercial-scale wave power facilities in the United States range from about 10¢/kWh to 39¢/ however, there are numerous environmental kWh, based primarily on the wave energy potential and technical challenges associated with this and operating and maintenance costs at the various technology. For example, there are concerns related locations that were considered. These costs do to interactions between ocean energy devices not compare favorably with some other forms of and marine mammals and both adult and juvenile renewable energy such as hydropower, but they are fish. Most coastal communities with wave energy somewhat less than the costs for early commercial resources are heavily dependent on local subsistence wind energy devices. EPRI estimates indicate that and commercial fisheries. Additional concerns are the COE for wave energy facilities will decrease related to ice interaction with infrastructure, debris along a learning curve that depends on knowledge that could damage devices, navigation hazards, and gained with each cycle of device improvement and impacts on marine life. operating experience. The learning curve for wave energy devices is projected to fall below the wind While construction and operation of ocean wave energy learning curve. Both curves are a function of energy devices is not considered near-term for installed capacity. Alaska, it has the potential to meet small-scale energy requirements for remote coastal communities. Feasibility studies like those done for in-stream hydrokinetic energy generation will be needed to provide a better understanding of the potential for and challenges of ocean wave energy generation. 209
  • 210. ReferencesBedard, R., Oregon offshore wave power demonstrationproject: Bridging the gap between the completed phase1 project definition study and the next phase - phase 2detailed design and permitting. 2005, EPRI.Bedard, R., et al., Final summary report: Projectdefinition study offshore wave power feasibilitydemonstration project. 2005, Electric Power ResearchInstitute Inc. pp.34.Bedard, R., HydroKinetic energy “lay of the land”. inDepartment of Energy HydroKinetic Workshop. 2005:Dept. of Energy.Bedard, R., et al. North American ocean energy status- March 2007 in 7th European Wave and Tidal EnergyConference. 2007. 11—14 Sept. 2007, Porto, Portugal:DigitalPapers Org.Bedard, R., Overview of U.S. ocean wave and currentenergy: Resource, technology, environmental, andbusiness issues and barriers. 2007, Electric PowerResearch Institute. pp.60.Comission, E., Ocean energy conversion in Europe:Recent advancements and prospects. 2006, Centre forRenewable Energy Sources: Pikermi, Greece. pp.36.EPRI, Primer: Power from ocean waves and tides. 2007,Electric Power Research Institute: Palo Alto, CA. pp.6.FERC, Licensing hydrokinetic pilot projects. 2008,Federal Energy Regulatory Commission. pp.33.MMS, Technology white paper on wave energy potentialon the U.S. outer continental shelf. 2006, MineralsManagement Service. pp.11.NOAA. Ecological effects of wave energy developmentin the Pacific Northwest in Ecological effects of waveenergy development in the Pacific Northwest: A scientificworkshop, Oct. 11 - 12, 2007.Robinson, M.C., Renewable energy technologies for useon the outer continental shelf. 2006, National RenewableEnergy Laboratory. pp.34.210
  • 211. Small-Scale Nuclear TechnologiesAEA Program Manager: Mike Harper (771-3025) 211
  • 212. IntroductionW orldwide, more than 15% of electricity isgenerated from nuclear power, with the United This type of fueling protocol allows plants to be simpler and less expensive to design and build.States, France, and Japan being leaders in this For designs that have no onsite spent nuclear fuel,technology. According to the International Energy the security requirements are reduced. The safetyAgency, as of 2007 there were 439 nuclear power systems are passive and highly reliable withoutreactors operating in 31 countries. As nuclear maintenance. The plants emit no greenhousepower generation has become established since the gases and can be small enough to be buried to1950s, the size of reactor units has grown from 60 minimize security issues. The power plant could beMW to more than 1300 MW, with corresponding transported by barge in modules and installed in aeconomies of scale in operation. At the same time building, with an excavation for the reactor vesselmany hundreds of smaller reactors have been built, and containment system as deep as 100 ft deep.both for naval use (primarily in submarines) and asneutron sources, yielding enormous expertise in the There are a number of potential applications forengineering of small nuclear units. these nuclear ‘batteries’ in Alaska. One of the most obvious would be to supply power for remoteConventional nuclear technology is considered a mines where diesel power would otherwise needmature technology. Significant progress is also being be imported at high cost. Six of this type of reactormade in the development of small-scale, sealed, self- have been proposed for the Alberta oil sands regioncontained nuclear reactors, which can essentially to provide heat to facilitate separation of oil from theoperate as a ‘battery’ to supply energy in the form sands. Power generation for remote communitiesof electricity and/or heat. These modern, small is another potentially attractive application. Thereactors for power generation are expected to have community of Galena has been working withgreater simplicity of design, the economy of mass Toshiba on obtaining a reactor for a number ofproduction, and reduced siting costs. They are also years, and several other Alaskan communitiesdesigned for a high level of safety in the event of have expressed interest in this technology. Galenamalfunction and may be built independently or as is interested in a 10 MW reactor system, the 4S;modules in a larger complex, with capacity added designed by Toshiba to provide power and heat toincrementally as required. The International Atomic the community. The city has passed a resolutionEnergy Agency (IAEA) defines ‘small’ as reactors supporting the installation of this reactor.under 300 MW. To put this in perspective, ‘small’is over 25% higher than the current peak powerdemand in the greater Fairbanks area (on the GVEAgrid).Small nuclear reactors are an intriguing emergingtechnology option for Alaska. Unlike conventionalreactors, these nuclear ‘batteries’ are designed tobe delivered to the site, installed with the generatorsystem, and operated for the prescribed life(typically 5-30 years). After this time period, thefuel assemblies are removed and returned to themanufacturer, and the reactor assembly is refueled orshipped to disposal intact.212
  • 213. Potential Reduction in Energy Cost Environmental ConsiderationsT he economics of the Toshiba 4S reactor appearcompelling, especially given the current cost of T he U.S. DOE has completed a ‘Situational Analysis’ for the community of Galena, includingelectricity at 70¢ per kWhr (from the 2007 PCE a preliminary environmental impact assessment.Report) and estimated heating fuel cost at $7.48 Compared to alternative energy sources, smallper gallon (based on ISER data) in Galena. The nuclear plants are promoted as virtually disappearingexpected cost of electricity from the 10 MW-size 4S into the background with little effect on theis between 10¢ and 20¢ per kWhr. The final cost of environment. Clearly, the permitting process underdelivered power is likely to vary based on a range of the Nuclear Regulatory Commission is an extremelyissues yet to be addressed related to the building of rigorous one, which addresses potential safety anda nuclear plant in Alaska. Cost will also depend on environmental concerns. Nonetheless, the Galenathe degree to which district heating and other uses project would be the first installation of its kindcan be found for the waste heat from the turbine and so contains inherent risks. For this reason,generator system. While the Toshiba reactor can the Yukon River Intertribal Watershed Council, amake 10 MW of electricity, it can simultaneously consortium of 66 First Nations (Canada) and Tribesmake 17 MWth (58 MMbtu) of thermal energy in the (Alaska) living along the Yukon River and dedicatedform of warm (~ 150º F ) water. to the protection and preservation of the Yukon River Watershed, has strongly opposed the Galena nuclearThe 4S reactor is currently at the beginning of the project.licensing process with the U.S. Nuclear RegulatoryCommission (NRC). This work is funded byToshiba. The company expects to submit the designcertification application for the 4S sometime in 2009,which will initiate the process that will ultimatelyresult in a Design Certification from the NRC.This process certifies that national experts havereviewed every aspect of the facility’s design andthat the vigorous, legally binding review process hasbeen satisfied. In parallel, an environmental reporton applying the technology to the site facility isprepared, reviewed, and approved. These factors areresolved in a standard review process, codified in 10CFR 52 and referred to as the combined licensingapplication (COLA). Seventeen applicationsfor over 30 new nuclear reactors are currentlyundergoing this review process. 213
  • 214. Other Manufacturers and Technology OptionsW hile the Toshiba 4S is one example ofa small nuclear reactor and the one closest to Worldwide, over 40 small reactor concepts are being pursued, but with the exception of the 4S, they arecommercialization, there is a large variety of all far from commercial. Below are some examplestechnologies with many proposed systems of a size of developers and manufacturers who have receivedappropriate for Alaskan applications. attention in recent years: The Pebble Bed Modular Reactor is a modular, high-temperature gas reactor that uses helium as its coolant. Its total output from 8 modules is 1320 MW. The PBMR is a PBMR reactor that has received significant attention. At a scale of interest for some of the larger mine sites or communities, this product is further away from permitting (and thus commercialization) than the Toshiba 4S technology. Hyperion Power Generation also touts a small, portable nuclear reactor (‘the size of a hot tub’) that would produce 27 MW worth of thermal energy. The system uses technology originally developed at Los Alamos National Laboratories, and now licensed by Hyperion Hyperion for commercial development. The suggested $25 million price tag is considered too low by many following the technology, and Hyperion is far from development of a commercial product. NuScale is another company that has licensed a design developed by the University of NuScale Power Oregon. This reactor is essentially a scaled-down version of a standard reactor, sized at approximately 40-50 MW. It is also in the early stages of development. Lawrence Livermore National Lab has designed a small, contained nuclear reactor as part S-Star of its S-Star program, with a 10 MW prototype and expected final product size of 50-100 MW. This reactor is nowhere near commercialization. The ‘International Reactor Innovative and Secure’ is a medium power (335 MW) reactor that has been under development for several years by Westinghouse in coordination with an international consortium. The most recent information is that the planned submittal of IRIS: a design certification application for IRIS has been pushed back from 2008 to 2010. In addition, Toshiba is now the majority owner of Westinghouse so the future of the IRIS reactor is not clear.214
  • 215. ConclusionI f all goes well, the Toshiba 4S could be providingGalena with power, space heating, and excess Referencescapacity for economic development opportunitiesby about 2015. If certain hurdles are not overcome, Nuclear Regulatory Commission website section on newhowever, a large amount of money and time will be nuclear plant designs at: doc-collections/fact-sheets/new-nuc-plant-des-bg.htmlspent without producing any new power capacity atall. In any case, nuclear technology should not be Galena white papers technical publications for the Galenaconsidered a near term solution for energy needs in nuclear project: htmAn additional consideration with nuclear reactorsis that at this time AEA/AIDEA regulations Galena Electric Power – a Situational Analysis. Paperspecifically preclude involvement in nuclear energy. published in 2004 by the University of Alaska for NREL.These regulations could hamper deployment of the if and when it becomes readily available. power_draftfinal_15Dec2004.pdf Status of Small Reactor Designs Without On-Site Refueling, IAEA-TECDOC-1536, International Atomic Energy Agency, January 2007 215
  • 216. Alaskan coal resources are spread across coal basins and fields in the northern, interior, and southcentral regions of the state.216
  • 217. Coalbed MethaneAEA Program Manager: James Jensen (771-3043) TECHNOLOGY SNAPSHOT: COALBED METHANE Worldwide resources estimated between 3,000 to 9000 tcf.Current production (Worldwide) USA production is about 1.6 bcf from about 20,000 wells in 2007.Current production (Alaska) None Coalbed gas is generally limited to sub-bituminous toResource Distribution bituminous coal rank. Coalbed gas content is unknown in most Alaska coal basins.Number of communities impacted Unknown Successful and established commercial CBM production inTechnology Readiness Lower 48, however no production or infrastructure in Alaska yet. Production through permafrost is unproven Water disposal must not adversely affect surface waters orEnvironmental Impact subsurface aquifers.Economic Status Uncertain in Alaska 217
  • 218. IntroductionC oal is one of the most abundant non-renewableenergy sources in the world, and Alaska has maturity or ‘coal rank’ before large volumes of thermogenic methane gas are generated. Lowersubstantial coal resources. The majority of Alaska’s rank lignite to subbituminous coals contain mostlycoal is located in the North Slope, followed by biogenic gas. The gas results from bacterial action onthe Cook Inlet region, Interior Alaska (mainly organic material, in the same manner that methane isHealy), the Alaska Peninsula, Copper River Basin, generated by bacteria in shallow garbage landfills.and numerous smaller basins and individual coallocalities throughout the state. Until 1981, gas It is important to note that there is no currentin coal seams, or coalbed methane (CBM), was production of biogenic gas from lignite coalsconsidered a dangerous hazard to underground because they lack a well-developed natural fracturemining operations and was vented to the surface. system. Production of biogenic gas from very thickBeginning in 1981, this ‘waste’ methane was (50-200ft-thick) sub-bituminous coals is occurring insuccessfully produced, initially from underground the Powder River Basin. There, gas contents averagemines, as a viable energy resource. Today the less than 35 cubic feet per ton. Most commerciallyproduction of coalbed methane from coal seams in viable coalbed methane production is from coalsthe Lower 48 accounts for about 1.6 billion cubic within the range of high volatile A bituminous tofeet of gas, or about 10% of the gas production in the low volatile bituminous. These coals provide bothUnited States. optimum gas content (as high as 800 cubic feet of gas per ton) and well-developed, natural fractureCoalbed methane is a clean-burning fuel, comparable cleat systems to provide a pathway to the well heating value (~1,000 Btu/scf) to conventionalnatural gas. Unlike conventional natural gas, with Finally, coal seams are usually saturated with water,CBM the coal serves as the source rock and as the with the hydrostatic pressure keeping the methanegas reservoir. Methane is formed along with water, within the coal. Sufficient hydrostatic pressurenitrogen, and carbon dioxide when buried plant must be present throughout the geologic history ofmaterial is converted into coal by heat, pressure, the coal seam for gas to be retained. If pressure isand chemical processes over millions of years. This reduced enough by erosion, uplift, or other means,coalification process generates methane-rich gas, the gas can escape from the coal leaving little or nowhich often is held in pores, fractures, and spaces gas behind.within the coal reservoir. As a reservoir, coal is amicroporous hydrocarbon mineral capable of holdinga large quantity of gas that is generated internally.This gas cannot be extracted from the coal reservoirunless these small micropores are connected througha well-developed fracture system called coal ‘cleats.’Permeability is the measurement of how well afluid or gas moves through a rock when the poresare connected through a cleat or fracture system.Even if there is sufficient coalbed gas, it cannot beproduced if there are few fractures resulting in lowpermeability.Coal must also reach critical threshold of thermal218
  • 219. Critical Factors for Coalbed Methane ProductionT he geology of the coal basin and coal seam reservoirs needs to be studied in considerable is to pump water from a well, reducing the pressure and causing the methane to ‘desorb’ and begin to detail so that the coal rank, coal thickness and flow from the coal. A key factor in the production of lateral extent, and degree of fracturing are known. CBM is permeability of the coal seam. The coal must Additionally, data on the quality of the coal seam be very permeable to allow the gas to flow in large water are important for disposal of produced water. quantities through the coal to the producing well. At Systematic coalbed methane field development is first, coalbed methane wells produce mostly water, but essential in order to maximize total gas production, over time and under proper geologic conditions, the field life, and profitability. Coalbed methane amount of water declines and gas production increases resources in some basins have been successfully as the bed is ‘dewatered.’ Water removal may continue exploited, while other basins with apparently similar for several years. geologic and hydrologic attributes have proven to be only poor to moderate coalbed methane producers. A developed coalbed methane well field consists Therefore, many pilot wells need to be drilled of production wells, gathering lines, separators, before the productivity of the reservoir in terms of compressors, and water disposal facilities. In each recoverable reserves for the average well and for the development, water and gas from each well site field as a whole can be predicted. are transported to a single site for water disposal,The usual method of producing methane from coal gas treatment and central compression, and then to distribution pipelines.Left: Natural fracture or cleat systemin coal. Without cleats, coal is porousbut NOT permeable, and gas cannot beproduced. 219
  • 220. Exploring for Coalbed Methane in AlaskaU nderstanding the detailed geology of coaldeposits is essential in evaluating prospective Few of the coal basins in Alaska have had this level of detailed study to determine whether they arecoalbed methane fields in Alaska. These geologic viable candidates for coalbed methane production.evaluations are important for determining the coal Nearly all lack data on coal seam thickness, fracturerank, quality, thickness, continuity, and pertinent spacing, and coalbed gas content. Coal quality datacharacteristics of the surrounding rock layers, as are sparse. As previously mentioned, coal rank iswell as of the basin’s hydrology. The ability for important because it directly influences the coal’s gascoal to produce methane as a resource is governed storage capacity. With the exception of the Northby the following critical controls: tectonic/structural Slope, Alaska Peninsula, northern Cook Inlet, and asetting, deposition environment, coal thickness and few other areas, many of the coal basins that underliedistribution, coal rank, gas content, permeability, or are adjacent to Alaska rural communities have notand hydrogeology. Initial data collection activites yet reached a depth of burial and a level of maturityto evaluate a prospective coal basin are detailed to form thermogenic coalbed methane, nor have theygeologic mapping, collection of coal outcrop developed adequate fracture systems. These basinssamples for coal quality and rank measurements, and with lignite coal are not viable candidates for CBMmeasurement of fractures or cleats within the coals. with today’s production technology.The next step is drilling test holes to collect gascontent data, measure permeability, and sample forwater quality.220
  • 221. Status of Coalbed Methane Exploration in AlaskaT here is currently no coalbed methane productionor developed coalbed gas infrastructure in Alaska. In addition to finding coal of sufficient rank and gas content, there are other, unique challenges to coalbedAttempts to explore and economically produce methane production in Alaska. Given that coal bedcoalbed gas in the northern Cook Inlet region met methane production often involves significant waterwith limited success. In 2004, a government-funded production, there must be some way to disposecoalbed methane exploratory hole was drilled at the of the fluid, especially if it does not meet strictcommunity of Fort Yukon. The exploratory hole EPA quality standards. The biggest challengesreentered a previously drilled hole in order to sample to production and disposal of this water are coldtwo low-rank lignite seams and collect samples temperatures and permafrost. Usually, producedto measure gas content. This followed a shallow water is either surface disposed in large evaporationseismic study conducted in 2001. It had determined ponds, surface discharged into existing bodiesthat the lignite was laterally continuous beneath the of water, or re-injected into deep disposal Evaporation ponds are common in many Lower 48 production facilities, but they are not a plausibleThe results of the gas content measurements were option for Alaska because of the long freezing-colddisappointing, as the upper coal seam averaged 13% winters. Surface discharge of even high qualitycubic feet per ton of gas; the lower lignite 19% cubic water into rivers or lakes is unlikely to be viablefeet per ton. Testing indicated that the permeability because these streams are frozen about 70 % of theof the lignite was extremely low with few fractures time, and such a practice is likely to be restrictedpresent within the lignitic coal seam. This project, due to possible impacts on fish habitat. Downholeincluding a preliminary seismic study and a single re-injection of produced water is also problematiccore test hole, cost in excess of $1.7 million. The because the effects of disposal in permafrost areimportance of this study was that it demonstrated unknown. A well bore can freeze up during pumpthat low-rank lignite coals that are prevalent in failure and cause significant problems that includemany of Alaska’s coal basins are not candidates for gas field shutdown. Additionally, re-injection has aeconomically viable coalbed methane production. danger of fluid communication between aquifers if the subsurface geology is poorly understood and theIn 2007 the Department of the Interior (USGS and rock layers are connected, resulting in contaminationBLM) conducted exploration for coalbed methane of a local source of drinking water. These hurdlesat Wainwright, Alaska on the western North Slope. can be overcome, but in Alaska it is important forTheir initial results were promising, and in 2008 developers to make special considerations whichthey drilled a delineation well to test the lateral may result in significant additional costs.extent of the coal beds, as well as an array of wellsfor a production test. Coals in the subsurface atWainwright are bituminous in rank and appear tohave generated sufficient methane to merit continuedtesting in 2009. Based on the known characteristicsof the western North Slope coal (optimum rank,thick and laterally continuous seams, and sufficientgas content and burial depth), this region containsthe best potential for coalbed gas production in all ofAlaska. 221
  • 222. ConclusionsA laska has a significant portion of the coalresources in North America, and coal is by far the References American Society of Testing Materials (ASTM), 1983,most abundant domestic energy resource available Standard classification of coal by rank: ASTM designa-in the United States. Nevertheless, the occurrence tion D388-82 in gaseous fuels, coal and coke, Philadel-of coal in an Alaskan sedimentary basin does not phia, 1983 Book of Standards, v. 5.05.necessarily mean that subsurface coalbed gas canbe economically produced. Subsurface coals need Ayers, W.B. 2002, Coalbed gas systems, resources, andappropriate geologic and hydrologic characteristics production and a review of contrasting cases from theto be CBM prospects. Lack of data on the geology, San Juan and Powder River Basins. AAPG Bulletin, V.86, No.11, PP.1853-1890.hydrology, subsurface water quality, coal quality,coal permeability, and gas content in most coal Bustin, R.M., and Clarkson, C.R., 1998, Geologicalbasins impedes assessing the coalbed methane controls on coalbed methane reservoir capacity and gaspotential in much of rural Alaska. However, there content, International Journal of Coal Geology, Volumeare areas that contain significant potential and could 38, Issues 1-2, Pages explored and developed if the right incentiveswere available and plans developed. Detailed Merritt, R.D., and Hawley, C.C., 1986, Map of Alaskasgeologic field work and surface outcrop sampling is coal resources: Alaska Division of Geological & Geo-required in most areas before proceeding to the step physical Surveys Special Report 37, 1 sheet, scaleof drill testing for gas content. The cost of obtaining 1:2,500,000coal gas content by drill coring is expensive, asmuch as $1 million per shallow drill hole as noted Rural Alaska Coal bed Methane: Application of Newin the Fort Yukon experience. Additionally, the Fort Technologies to Explore and Produce Energy, Final Report, 2006, Work Performed for grant DE-FC26-01-Yukon project confirmed that the low-rank lignite NT41248 for the National Energy Technology Labora-coals present in a number of basins are not viable tory, Arctic Energy Office, US Department of Energy, 123options for producing methane gas. pages.It is crucial that a proper assessment of all requisite Saulsberry, J.L., Schafer, P.S. and Schraufnagel, R.A.,geologic parameters be completed by qualified eds., 1996, A Guide to Coalbed Methane Reservoir En-personnel before development decisions are gineering, Gas Research Institute Report GRI-94/0397,made. A poorly conceived and executed CBM Chicago, Illinois, 342 pages.exploration program in rural Alaska could raisefalse expectations of the existence of a profitable Schraufnagel, R.A. 1993, Coal bed methane production,resource where it is not geologically reasonable. in B.E. Law and D.D. Rice, eds., Hydrocarbons fromSimilarly, a poorly executed study could condemn a coal: AAPG studies in Geology 38, 341-359.resource not properly assessed or evaluated for test Scott, A. R., 1995, Application of burial history andsites. Like all energy resources, coalbed methane coalification to coalbed methane producibility: in Geol-can be an excellent source of heat and power, but ogy and Hydrology of Coalbed Methane Producibility inunique geologic conditions must be present, and the United States: Analogs for the World, (W.R. Kaiser,rigorous scientific and economic evaluations need be A.R. Scott, and R. Tyler eds.), InterGas ’95, The Univer-performed before development can occur. sity of Alabama Continuing Education Workshop, pages 127-136. Stach, E. Mackowsky, M-Th., Teichmuller, M. Taylor, G.H., Chandra, D., and Teischmuuler R., 1975, Stach’s textbook for coal petrology (2nd Ed.): Gebruder Borntra- eger, Berlin, Stuttgart, 428 pages.222
  • 223. Fuel CellsAEA Program Manager: Peter Crimp (771-3039)F uel cells are electrochemical devices that produceelectricity and heat without combustion by combining Other issues include cost and durability. The University of Alaska Fairbanks has been involved in the testing of approximately ten fuel cells in the lasta fuel with an oxidizer in separate half-cell reactions. decade. Despite ideal laboratory conditions, all haveFuel cells are simple in construction, consisting of failed. Causes of these failures included membranea “stack” of repeating components. They can be failure, catalyst poisoning, control system problems,very efficient: hydrogen-oxygen fuel cells have a and design flaws. Also, despite their high cost, nonetheoretical upper efficiency limit in excess of 70%. of these systems has shown efficiency greater than thatThey can be pollution free (when operating on pure of a conventional diesel engine. Depending on designhydrogen) and have no moving parts in the stack and manufacturer, efficiencies have varied from the(although moving air and fuel does require mechanical low teens to the high 30s.action, except on the smallest systems). Fuel cellsare widely considered to be leading candidates for At this time, the only commercial fuel cell available isreplacement of internal combustion engines in cars a 400 kW unit developed by UTC Power. These unitsand for distributed power systems. are available at a $1,000,000 installed cost ($2,500/ kW); however, this product operates only on naturalThese features would seem to make fuel cells an gas, which is not a readily available fuel in most ruralideal choice for efficient power generation, but Alaskan communities. Even where natural gas isfuel cells are not yet practical. They must jump a available, the capital cost for the fuel cell unit is highernumber of technical hurdles before being suitable for than the capital cost for a natural gas turbine, and thewide-scale use. For example, fuel cells have strict efficiencies are approximately equal.requirements for reactant purity and can be ruined ifthese requirements are not met. One type of fuel cellis intolerant of carbon monoxide and can be poisonedsimply by the 1-2 ppm of CO present in ambient air. Fuel Cell undergoing testing at the University of Alaska Center for Energy and Power 223
  • 224. Alternative Fuels Program Manager: James Jensen (771-3043) Waste vegetable oil products are a great source of energy for cars and trucks fit- ted with the conversion system. TECHNOLOGY SNAPSHOT: ALTERNATIVE FUELS Potential to produce liquid fuels at lower cost than petroleum based fuels. Issues include CO2Fischer-Tropsch Fuels sequestration, high capital cost, and technology shortage Based on construction of gas pipeline, Tanana isPropane serving as pilot project Has been used economically by large fish processors,Fish Oil fish oil from smaller processors could have potential but has been slow to develop Rapidly evolving technologies with limitedEthanol and Biodiesel feedstock available at this timeWaste Oil Limited resource availability Expensive to produce and store, pilot studies haveHydrogen not been shown to be economical Requires very cheap electricity and diesel fuel costsAmmonia above $10/gallon for consideration Possibility to use plug-in electric vehicles in areas ofElectricity the state where the cost of electricity is low224
  • 225. IntroductionT he idea of producing or otherwise usingalternative fuels is appealing. Liquid or gas-based There are several, recently completed studies analyzing the opportunities for coal-to-liquids (CTL)fuel can be stored and transported similarly to or gas-to-liquids (GTL) projects in Alaska. The mostexisting petroleum-based fuels. Alternative fuels recent was a study commissioned by the Fairbankssuch as hydrogen, ammonia, or electricity are Economic Development Corporation (FEDC) afteractually best thought of as tools to store energy until CTL technology was identified as a technology ofa time when it is more valuable, or to move energy interest by the Fairbanks Energy Task Force reportto a place where it is more valuable. Alternative dated December 2007.fuels such as fish oil, Fischer-Tropsch fuels, andbiodiesel are simply fuels derived from underutilized This study was completed by Hatch Engineeringresources. and is available on the FEDC website. The report considers three different potential plants sized at either 20,000 or 40,000 bbl/d with a coal, or coalFischer-Tropsch Fuels and natural gas feedstock. The report assumes a long-term supply of coal at $25/ton and a way toFischer-Tropsch (F-T) fuels are liquid-phase sequester CO2 generated in the process. Given thesesynthetic fuels made from a feedstock known as assumptions, projected capital costs range from 4.1synthesis gas. Synthesis gas, or syn gas as it is to 7.5 billion dollars (+/-40%). With an assumedsometimes called, is a gas stream consisting of interest rate of return of 12%, the breakeven F-Tprimarily carbon monoxide and hydrogen. Syn gas product price ranged from $108/bbl-$138/bblcan easily be produced by gasifying coal or biomass, (Hatch Report, page 2). The United States Air Forceor by reforming natural gas. The F-T process was has expressed some interest in locating this plantinvented during the 1920s in Germany by Franz at Eielson Air Force Base. The plant would thenFischer and Hans Tropsch. It was used by Germany provide the air force with a substantial amount ofduring World War II to convert locally available synthetic jet fuel. One of the largest unaddressedcoal into a liquid fuel. Today the F-T process is hurdles for this project is finding a cost effectivean established technology that has been utilized method to sequester the massive amounts of carboncommercially in South Africa for many years to dioxide produced from this project.produce liquid fuels and feedstock for a wide varietyof petrochemical products. In the last several years, Another possible location considered for a CTL plantas petroleum prices have risen and support for is the Beluga coal fields on the west side of Cookenergy independence has grown, the F-T process has Inlet. The advantage here is that the coal is currentlyreceived renewed interest worldwide. Alaska, with a stranded resource, but close to a deep water portits massive coal, natural gas, and biomass resources with export potential to the west coast of the U.S.has taken part in this resurgence. and to overseas markets. CO2 sequestration would still be a challenge, but there are depleted natural gas wells that may prove viable for long-term storage. ANGTL, LLC has been working to advance an 80,000 bbl/d plant in this area. 225
  • 226. PropaneUsing natural gas as a feedstock for F-T fuels isalso a potential option for Alaska. Converting Propane is already used in rural Alaska, primarilynatural gas to synthetic petroleum and transporting for cooking. The Alaska Natural Gas Developmentit down the Trans Alaska Pipeline is one way to Authority (ANGDA) is now assessing the feasibilityaccess the natural gas on the North Slope. Another of using propane in river communities across theoption would be to use both coal and natural gas as state for electricity, as well as for space and waterfeedstock. The primary advantage here would be heating. They are using Tanana as a demonstrationthat natural gas produces a syn gas that is high in community to determine the feasibility of convertinghydrogen, whereas coal produces a syn gas high in existing appliances, testing small co-generationcarbon monoxide. By adjusting syn gas amounts systems, and converting heavy equipment andfrom each source, the CO to H2 ratio for the F-T vehicles to run on propane.conversion could be optimized. The Hatch studycommissioned by FEDC considered a natural gas The Yukon-Kuskokwim Propane Demonstrationand coal feedstock scenario as one of the options, Project is designed to greatly expand use of propaneand they found it to be the economically preferable in rural Alaska. This pilot project subsidizesoption assuming that the natural gas is available. propane costs to reflect the cost ANGDA anticipates, assuming a natural gas pipeline is constructed andA third possible feedstock for F-T fuels is biomass. a propalizing plant is installed at the Yukon RiverThe primary advantage of using biomass is that crossing. The feasibility study includes assessingthe process would be nearly carbon neutral over the challenges associated with transporting propanethe growth cycle of the biomass. For large scale by existing barge companies and using propaneplants such as the two described above, finding for electricity and space heating. Two 1000-gallonenough biomass and delivering it economically propane tanks have been delivered to Tanana as partto the plant would be challenging. Given this of the project; however, there are some concernsproblem, ANGTL and others have proposed smaller with Coast Guard regulations regarding propaneplants that use woody biomass or municipal solid transport on navigable waterways.waste as feedstock. At these smaller scales, theeconomics have not been proven. Most successful While the cost of propane including delivery is notF-T technology licensors have shown little interest a major expense for rural Alaskans in the smallin Alaska. Nonetheless, biomass as a feedstock volumes currently used, larger quantities do notmay have the most promise in rural Alaska, where demonstrate an economic benefit when used fora small plant would produce fuel locally and space heating or power generation. Nonetheless,displace expensive diesel fuel. The operational and there are some benefits to propane over diesel fuels,technological risk of such a plant would be high. primarily in terms of environmental concerns.Given Alaska’s ample supply of potential F-T ANGDA’s preliminary estimates suggest thatfeedstocks, the technology could have a future in the communities could save money by using propanestate; however, all potential projects face significant instead of other fossil fuels if the natural gas pipelinechallenges related to CO2 sequestration, high is built. The Tanana project is designed as a guineacapital costs, and ability to attract demonstrated F-T pig to get a better sense of conversion costs andtechnology licensors/vendors. economic viability of the fuel.226
  • 227. Fish oilFish oil is a natural fuel that can be a co-product fuel has created greater incentive to render fish oil toof the fish processing industry. The oil is rendered replace conventional diesel in rural Alaska. Alaskafrom fish waste using a multi-step process of heating, currently produces roughly 8 million gallons of fishpressing, centrifugal separation, and filtering. Fish oil each year. The majority of this oil is producedoil can be used either directly as a boiler fuel or by the largest fish processors in the Aleutian Islands.converted into a biodiesel and used for diesel engine Statewide, there is an estimated 13 million gallons offuel and/or heating fuel. Raw fish oil is also being unrecovered fish oil each year.used by a number of fish processors around the state This unrecovered fish oil is primarily from thefor onsite heating and power generation. fish waste of Alaska’s many small fish processors. Individually, theseFor the last couple of processors do notyears The University have the throughputof Alaska Arctic to justify the capitalEnergy Technology cost of fish oilDevelopment rendering equipment.Laboratory (AETDL) A portable fish oilhas been testing rendering facilityfish oil biodiesel might provide ain a diesel gen- solution to thisset. The results problem. For theindicate that fish last coupleof years,oil biodiesel can be the Alaska Energyused for diesel-based Authority has triedgeneration but that to encourage theneeds to be handled development ofdifferently from such a module,standard diesel. Two of the biggest issues are its but unfortunately its efforts have met with littlecomparatively high cloud point temperature (34ºF) success. Long distances between processing siteswhen solid waxy particles begin to form within and short, overlapping fishing seasons are significantthe diesel fuel and plug delivery systems, and its hurdles that hurt the economics of a portable fish oiltendency to oxidize more quickly than petroleum rendering module.based diesel. Using oxidized fish oil biodiesel ina diesel generator can cause shellacking of fuelinjectors and damage the engine’s fuel handlingsystem. Despite these challenges, fish oil and fishoil biodiesel can be a very economical alternativein communities where large quantities of fish oil isreadily available. The recent rise in the cost of diesel 227
  • 228. Ethanol and Biodiesel Waste Vegetable OilIn the U.S., most ethanol is made from terrestrial Biodiesel from waste vegetable oil or straight wastefood crops like corn and soy beans. These bio- vegetable oil represents a limited opportunity infuels are considered first generation bio-fuels Alaska.and are inappropriate for most of Alaska, dueto their long growth cycle and energy-intensive Only the largest communities, Anchorage, Fairbanks,production, to land usage, and to Alaska’s climate and Juneau, have large enough quantities of wasteand environmental conditions. There is a new push vegetable oil to commercially utilize the resource.across the United States for second generation bio- All of these communities have groups workingfuels, which are more environmentally friendly and toward developing this resource for biodieselmade from feedstock that is otherwise wasted or production; however, the volumes will always behas little value. Options that have been considered small when considered from a statewide perspective.for Alaska include cellulosic ethanol and algaebiodiesel. In areas where even smaller quantities of waste vegetable oil are available, heating applications toThe raw materials needed to produce cellulosic be best. There are commercially available waste-ethanol are plentiful in most parts of Alaska. oil burners that can burn waste vegetable oil and/orCellulose is present in every plant, in the form used motor oil; the smallest units available are ratedof straw, grass, and wood. It could be harvested around 100,000 Btu/hr and cost around $5,000.from local forests, or cellulose-producing cropscould be planted on land considered marginal foragriculture, but biomass is not an energy dense Hydrogenfeedstock for making liquid fuels, so transportationcosts would be significant. In the Lower 48, the Hydrogen is not a source of energy, but a way toDepartment of Energy announced funding for six store energy. You don’t mine hydrogen; you usepilot cellulosic ethanol plants in 2007. These plants electricity to make it. The ability to store energywill require considerable financial support through is valuable in areas of the state with significantgrants and subsidies to operate, but the hope is that renewable energy resources but limited energy loadsthe technology will advance to where the process to make use of them. This scenario describes muchbecomes economic and cost-competitive with other of Alaska, where there is a nearly limitless supplyalternatives. of wind, wave, and tidal energy. Hydrogen could one day play a role in capturing that energy andOver the last few years, algae biodiesel has received transporting it to market. If this is ever to happen,significant attention worldwide. This is due to cost reductions and/or efficiency gains need to bealgae’s fast growth rate and high oil content. Much made in the areas of producing, compressing, andresearch is going into this potential feedstock for storing hydrogen. As hydrogen-related costs drop,biodiesel; however, with Alaska’s limited amount of markets can develop that utilize the hydrogen. Forsunshine the state has not been the focus of any of more information on hydrogen as an energy storagethis activity. Alaska’s current options for biodiesel option, see the section on Energy Storage.feedstock are fish oil, and waste vegetable oil.228
  • 229. Ammonia (NH3) Manufacturing ammonia onsite in rural Alaska is a possibility. It could be manufactured fromAmmonia has been used as a fuel in certain renewable energy sources using an air separationapplications, to power buses in Belgium during plant to collect nitrogen (air is composed of 78%World War II and to power the X15 rocket airplane, nitrogen), and an electrolyzer to generate hydrogenthat set speed and altitude records in the early 1960s. from water. In contrast to using the hydrogenNow ammonia has been proposed as an alternative directly, converting the hydrogen to ammoniato fossil fuels for internal combustion engines eliminates the need for compression, as ammonia canfor stationary generator and vehicle applications. be stored and transported as a liquid at reasonableAmmonia is preferable to hydrogen in terms of pressures. This means that existing infrastructureenergy storage, but it has approximately half the could be used for handling, storing, and transportingenergy density of diesel. This means it requires without the need for exotic storage material. Intwice the storage volume to achieve the same addition, industry standards and regulations exist forenergy content. Nonetheless, ammonia is a viable the safe handling and storage of ammonia. Optimistic Break-Even Point for Ammonia Fuel Production $ 4.10 $/kg H2 58 % electricity cost $ 1.72 $/kg assuming no cost of electricity cost per year for electrolyzer including capital $ 336,713 and O&M $ 1,779,766 full plant cost per year, capital and O&M only Annual value needed for capital recovery and $ 1,779,766 operation 1,221 tons ammonia produced per year $ 1,457.15 break even cost per ton of ammonia $ 75.19 Price per MMBtu for ammonia $ 10.45 Equivalent price per gallon diesel fuelalternative and it can run in most existing engines Based on the expected cost of the equipment,with only minor modifications to carburetors and ammonia would not become economic to use as ainjectors. Ammonia as fuel has no serious problems fuel until the cost of diesel reached $10.45 per gallonassociated with it in terms of toxicity, flammability, (see analysis above). This is an optimistic analysisor emissions. It is widely produced and distributed, based on commercial production of 4.5 Mmbbl peralthough transporting ammonia over long distances year and no electricity cost. A more realistic analysiswould not be economical due to its lower energy calculated a break-even equivalent value of dieselcontent per pound. About 80% or more of the fuel at $13.50.ammonia produced is used for fertilizing agriculturalcrops. The Agrium fertilizer plant on the Kenai Since diesel is not expected to reach this value, evenPeninsula produced 280,000 tons of ammonia in rural Alaska in the near future, this option doesfertilizer annually from a natural gas feedstock and not appear economically viable unless the equipmentshipped the product to many countries across the cost (electrolyzer and air separation plant) is reducedglobe. The plant shut down in 2007 due to shortage significantly, or there is a pilot project where theof natural gas supply in Cook Inlet. capital costs are offset by grants. 229
  • 230. ElectricityElectricity has the ability and, under some scenariosthe economic justification to replace petroleum-based transportation and heating fuel. Over the lastfew years, as heating fuel prices have increased,Alaska has seen communities with cheap hydro-based power move towards greater use of electricspace heating. This trend will continue in areaswhere plentiful supplies of renewable electricity costless on a delivered BTU basis than heating fuel. Inaddition to heating, electric-power transportation isan emerging option. There are already commerciallyavailable electric vehicles, snow machines, andfour wheeler. As battery technology improves,these vehicles will cost less and show improvedrange and efficiency. Plug-in electric vehicles mayalso provide great advantage to small grids thathave access to intermittent renewable power. Withcontinued technology development, the batteriesof these vehicles may be able to stabilize the gridby drawing or dispatching power whenever thereis a supply/load imbalance. This capability wouldallow small grids to use higher percentages of non-dispatchable renewable power without reducingpower quality.230
  • 231. Snettisham Hydropower Plant near Juneau. Hydro power is someof the lowest cost energy in the state and can be used to displacehigh-cost heating and transportation fuels. 231
  • 232. Explanation to Database MethodologyHow to Read and Interpret this Report Energy information collected by the Institute for Social and Economic Research (ISER) has beenThis report is the result of a process begun in the used to estimate the heating fuel and transportationspring of 2008 when the Alaska Energy Authority fuel used in each community. However, because noheld a series of regional and community meetings process is in place for collecting this information, theto address the issue of rising energy prices. At that data, based on extrapolations from values collectedtime, the climbing price of crude oil resulted in for 20 sample communities, is incomplete. Aslarge increases in the cost of energy for residents heating fuel costs are particularly burdensome forthroughout the state, especially for those remote households in rural communities, this lack of datacommunities. is a major weakness of this analysis. ISER has requested funding to address this issue by creatingAt these community meetings, AEA director Steve an energy information data network to collect energyHaagenson outlined a process that would involve cost and consumption data from all communities. Itcollecting information from local communities to is hoped that future versions of this document willbe synthesized into a single state energy plan. At contain more defensible data.the meetings, maps were created that showed wherecommunity residents were aware of possible local Another source of information is the Department ofenergy resources. Community and Regional Affairs. This department supplied a complete copy of their database for use inIn addition to the information collected in the this database. The population data, location, culture,community meetings, several other sources of and history sections are taken directly from it. Theinformation have been used. AEA organized United States Census data is taken from the sameworking groups based on technology: diesel database, but from the 2000 census. New data willefficiency, heat recovery, wind, hydro, biomass, not be collected in the next census. This is a furthergeothermal, and hydrokinetic and wave energy. argument for support of the ISER energy informationEach of these groups held meetings at AEA, with data network.interested parties joining the discussion by phone.At the end of this process, a list of communities Every attempt has been made to collect the mostwhere each of these technologies might be applicable reliable information available for use in this report,was created, along with estimates of the cost of using so that it will be a useful tool for communities,these technologies. utilities, funding agencies, and others to make good decisions about how best to provide energy to eachAnother important source of information for community. However, the readers of this reportthis report is the PCE (Power Cost Equalization) must note that in many cases the reliability of theprogram, designed to reduce the cost of electricity underlying data is not as robust as they might wish.for residences in remote communities. Information This necessarily limits the utility of this tool. It iscollected in the administration of this program is hoped that better data can be collected and that thisthe most complete data available for the state of database can be improved.Alaska. This data set contains information aboutdiesel prices, electric prices, and consumption of Layout of the Community Reportselectricity by a community. This information appliesonly to fuel used for power generation and it gives This report is based on a community by communityno indication of heating fuel prices or use, or fuels analysis and is divided into five basic sections: theused for transportation. cover page, the community description, analysis232
  • 233. Explanation to Database Methodologyof the current energy situation, possible upgrades that might be favorable to pursue), as compared withto the existing power plant, and locally available projects that result in higher energy costs (ones thatalternative resources. probably should be avoided). How these numbers are calculated is covered in the section below. The yellow background indicates the possible range ofPage 1 (Cover Page): costs as the price of diesel fuel, with the bottomThe cover page contains five basic items: the name estimated at $50 per barrel, and the top at $150 perof the community, a map of Alaska showing the barrel.location of the community, a pie chart and a per-capita table showing the estimated breakdownof energy use in the community, and two meters Page 2: Community Informationshowing the current cost of energy as compared with If a community is in the PCE program, this will bepossible alternatives. indicated by a ‘PCE’ designation besidw this line.Energy Use Pie Chart and Per-Capita Data: Some communities have been included that are not PCE communities, but the information that followsThe data in this pie chart is based on the PCE data will be incomplete.collected and the ISER extrapolations for eachcommunity. As noted above, the PCE data is Current Energy Status-Electric (PCE)more complete and trustworthy than the other two This section begins with the most important andcomponents, but even the PCE data is sometimes most difficult number in the plan: the Estimatedincomplete. For example, Akutan PCE data reports Local Fuel Cost at $110/bbl in each community.only fuel consumed in the community power plant, The numbers included in this report have beenbut the community has a fish processer that operates estimated by ISER and AEA, and are the same asits own power plant. The community population those used for evaluation in the Renewable Energycounts the people working at the fish plant. When Fund reviews.these facts are combined, it appears that the energyconsumption in this village is low on a per-capita Utilities are required to submit receipts for fuelbasis, but this simply reflects the lack of data on deliveries in order to get reimbursed from PCE, butthe fuel consumption at the fish processer. Other three things affect the price they pay: the cost ofcommunities, like Cold Bay, have the opposite crude oil at the time of purchase, the cost of shippingproblem: the census data indicates only 72 people that fuel to that community, and the rates that thein the community, but an average electrical load of utility is able to negotiate with the fuel supplier.304 kW and high fuel prices. This results in a high Some utilities have formed fuel-buying co-ops tocalculated per capita energy cost. increase their purchasing power in the market, and they have been