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Alaska Energy Pathway
Toward energy independence
A guide for Alaskan communities to utilize local energy resources
July 2010
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Cost Block Information:
This publication for an Alaska Energy
Pathway was produced by the Alaska
Energy Authority. It was printed at a cost
of $4.436 each by Northern Printing
Company, Inc. in Anchorage.
Wind turbines in Kotzebue
See photo credits page 44.
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Table of Contents
Message from the Governor 2
Introduction from the AEA Executive Director 3
Executive Summary 5
20% Energy Efficiency and Conservation Improvements by 2020 11
Renewable Energy by 2025 13
Energy Security and its Implications for Alaskans 15
Economic Development 17
Investing in Innovation 20
Investing in Education and Workforce Development 21
Alaska’s Fossil Energy Future 23
Regional Energy Planning 25
Financing Alaskan Energy Projects 35
Explanation of Appendices 40
DVD Table of Contents 43
Acknowledgements 44
DVD Pocket 45
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Message from the Governor
Access to energy is critical for Alaska. We create economic opportunity,
heat our homes, and derive significant state revenue from energy
resources.
Alaskans and our country depend on conventional and renewable energy
sources, and Alaska natural gas is the next logical bridge to a cleaner
energy future.
Production of North Slope natural gas is within reach where two pipeline
open seasons vie for gas shippers this summer. Although an overland
route to North American markets dominates headlines, the Alaska
Pipeline Project includes a design that can take up to three billion cubic
feet of gas per day to Valdez where an LNG plant can serve Pacific Rim
markets. Having multiple options for gas projects is good for Alaska
– it gives more opportunities for investment, jobs, and Alaska gas for
Alaskans.
In addition to the work being done on a large diameter gas pipeline, my
administration has a team of pipeline engineers determining the cost
of constructing a smaller diameter bullet line. Funds have also been
secured to continue this work in conjunction with a new development
team created by legislation passed this year. By assuring that one of these
projects advance, Alaskans will secure access to this energy source for
personal and industrial use.
We still have a lot of oil to produce, but history is defined by generations
– not just a few years. Our generation will experience a transition on the
North Slope to gas production and around the state to more renewable
energy. Along the way, we plan to invest oil revenue in long-term
infrastructure projects to provide energy price stability and affordable
energy long into the future.
This Alaska Energy Pathway reaffirms our goal to generate 50% of our
electric needs from renewable and alternative energy sources by the year
2025. I support transitioning in greater measure to renewable energy
sources, but we can be more aggressive. In this document, we set targets
for increasing energy efficiency statewide by 15% by 2020. We also
present a long-term vision for achieving the greatest degree of energy
independence possible from a combination of in-state renewables and
fossil energy resources.
These are aggressive targets – indeed, some of the most aggressive in the
nation. And yet, I know Alaskans are up to the challenge. We can blaze
a path to energy independence and be an example to the world in this
achievement.
Hundreds of Alaskans took the first step in this challenge by contributing
to this Alaska Energy Pathway which lays out a general strategy that
can be applied by individual communities. The next step for successful
implementation of any of the suggested strategies requires even more
local participation and passion.
While the Alaska Energy Pathway provides information and guidance, it
will take action at the local level to develop individual community plans
to lower energy costs. As your Governor, I will work with you to remove
roadblocks and provide resources to facilitate this journey to a more
secure energy future.
Governor Sean Parnell
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Maintenance (O&M) costs and fixed energy costs were included
to determine the delivered cost of energy to the community. The
delivered cost number is intended to identify the real cost of current and
alternative energy sources.
Developing an Alaska Energy Pathway
A resource map was constructed that indicates the available resources
for each community; it can be viewed in Appendix 5. As would be
expected, every resource is not available in each community. It was a
surprise, however, that even with all the resources in Alaska, there are
regions that have only one viable local resource for fuel. For example,
western Alaska communities may only have wind or the Upper Yukon
may only have wood.
Costs for wind energy are included in the report, but in the electric
wind-diesel systems, wind energy is limited to 20 to 30% due to control
complexity and system operations. Another observation was that, even
with 30% wind penetration, the remaining 70% of the electrical energy
would come from diesel. Diesel can be extremely expensive in rural
Alaska, so we searched for solutions that maximize wind for both
electricity and heat.
Community Plans
AEA has developed information on options that each community can
use to achieve energy savings within the following time frames:
☼Current resource usage levels;
☼Immediate start of conservation and efficiency measures
over a 10-year period;
☼Short-term (1–3 years);
☼Mid-term (2–10 years);
☼Long-term (5–15 years); and
☼A stretch goal or aiming stake for the long term.
Introduction from the AEA Executive Director
The people of Alaska are truly fortunate to have an abundance of natural
resources. These natural resources promise a robust economy, and the
incredible innate beauty of Alaska enriches our lives. At the heart of this
abundance are the communities that lie scattered among the expanse of
raw wilderness storing our resource riches. It is the people of Alaska, the
real fuel of progress, that give us reason to ponder how we might better
use our vast wealth to improve quality of life in our great state. In terms
of energy, Alaska has been both blessed… and challenged. The long
distances separating communities and relatively low community energy
use levels challenge the economics of deliverability despite the diversity
and abundance of our energy resource wealth. Determining a best-use
scenario for each community within the context of their unique needs
and potential is the key to ensuring a sustainable future for Alaska’s
people.
Alaska Energy
In January 2009, the Alaska Energy Authority (AEA) published a report
titled “Alaska Energy - A first step toward energy independence.” This
guide is now being used by communities to review available resources
and help determine least-cost energy options. The complete guide is
available on the AEA website, www.akenergyauthority.org, in a Wiki
format at www.energy-alaska.com and on the enclosed DVD.
The 2009 database provides a technology-screening tool that was
developed to allow each community to review locally available
resources and determine the most cost-efficient energy options based
on delivered cost of energy to residents. For the first time, energy
use in each community was determined for three major components:
electricity, space heating, and transportation.
The net result of the 2009 database was a focusing tool that provides
each community with least-cost options for their electricity, space
heating, and transportation. Prices are based on a delivered cost that
includes capital cost for infrastructure and alternative infrastructure
that may be required for alternative fuel options. Operations and
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We developed these community plan components in response to the
commonly heard and pressing Alaskan question, “What can I do now?”
In the immediate time frame, conservation and efficiency increases
are key. Appendix 6 includes a copy of “Energy Savers Tips for Rural
Alaskans,” which shares helpful hints to achieve the Governor’s vision
of increasing energy efficiency by 20% by 2020. Achieving this target
will take a group effort, but AEA is committed to promoting smart
programs that will help achieve the targets. On the supply side, Rounds
I and II of Alaska’s Renewable Energy Fund are providing $125 million
to approximately 100 renewable energy projects with utilities, native
corporations, and municipalities across Alaska.
Short-term and mid-term solutions are achieved by using technologies
that have short construction times, for example, wind-diesel systems for
electricity, wind-thermal systems, or highly efficient clean burning wood
stoves for heat.
Long-term solutions are achieved by using mature technologies, such as
hydroelectric, alone or with emerging technologies. Hydroelectric has
an extended time frame for permitting and construction, and emerging
technologies require additional information before recommending
commercial application. It is important to begin evaluating emerging
technologies today in order that we understand the application when our
decision to deploy is made.
AEA has prepared generic resource deployment scenarios for
communities based on their available resources, and has been sharing
the plans with utilities, native corporations, and municipalities. Alaskans
have expressed great interest in participating in their community
pathway development. Local participation is critical to the success
of energy planning and development. Communities and regions will
identify their preferences and ultimately make the community scenarios
their own.
Reality of Renewables
As would be expected, there are some communities that are too small
for certain technologies to be practical. In addition there are resources
that are very expensive for the energy produced. During the model trials,
options that increased the cost of energy were removed for the specific
community. If sufficient energy was not available, that community
would continue the use of diesel fuel.
Putting It All Together
The Alaska Energy Pathway will provide direction and focus to the goal
that all Alaskans should have access to affordable power. By making
energy from locally available resources to meet local energy needs,
Alaskans will change the curses of long distance and low usage into an
expansion of our good fortune. In addition to the vision or deployment
strategy, AEA has recommended several existing financial tools to fund
the new projects, such as use of the Power Project Revolving Loan
Fund, capital debt reduction, traditional market financing, and available
state and federal loan and loan guarantee programs.
The target approach coupled with financial and decision tools will
allow Alaskans to create a blended energy source portfolio on our
own time frame as economic conditions allow. The journey to energy
independence will require Alaskans to pull together and will require
focus, determination, passion, courage, innovation, risk taking, and
persistence. If Alaska gets even
halfway to this stretch goal, we will be
well ahead of most states and nations.
Then, much like the North Star, we
can serve as a steady, shining guide to
others undertaking the path to energy
independence.
Introduction from the AEA Executive Director
AEA Executive Director
Steve Haagenson
Statewide Energy Coordinator
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Over the past two years, the Alaska Energy Authority has been involved
in developing a long-term energy strategy for the State of Alaska. As
part of this process, we have engaged Alaskans from around the state
and with very diverse backgrounds to find out how energy supply and
cost impacts their lives, and to get input on what resources should be
developed to meet future energy needs for electricity, heating, and
transportation.
The first step in this process resulted in the 2009 publication of ‘Alaska
Energy – A first step toward energy independence.’ This document is
available for download at www.akenergyauthority.org, and contains
information on all critical energy technologies, as well as a database
of community energy resources compiled from a variety of sources,
including conversations with ordinary Alaskans during our visits
around the state.
This new report – which we are calling the ‘Alaska Energy Pathway,’
goes one step further. The Pathway starts with addressing the ‘big
picture’ by beginning to set an overall policy direction for the State,
including aggressive targets for energy efficiency and conservation as
well as renewable energy development. The Pathway also identifies
critical priority areas for Alaska that are closely related to energy
supply and demand, including economic development, climate change,
energy security, and education and workforce development. Finally, it
includes much more detailed information on an energy path forward for
each community and region in the State.
We have structured this Pathway to begin with a discussion of the
‘big picture’ to set the context for energy planning for the State, but
ultimately action must occur at the regional and community levels.
To address energy issues at this level, we divided our focus into two
regions and used different approaches for each. The first is the Railbelt
region that extends from Homer to Fairbanks and includes the major
metropolitan areas such as Anchorage and the Mat-Su Valley. The
second region encompasses the rest of state, including rural Alaska,
the southeast region, and communities located on the road system that
have their own, isolated electric grid. While very different approaches
were taken in analyzing these distinct regions, the end results were
surprisingly similar. Both methods incorporated conservation and
efficiency measures, renewable targets that would reduce the reliance
on fossil fuels to lower greenhouse gas emissions, a goal of stable
affordable rates for residents and businesses, and increased energy
security. The results of this process are summarized on pages 27-
33 of this document using the community of Kipnuk as an example.
The DVD inserted in the back of this publication contains detailed
information for each community and region of the state.
The planning method for the Railbelt region extending from Fairbanks
to Homer used a traditional utility planning approach called an
Integrated Resource Plan (IRP). This Railbelt IRP looked at all the
resources along this interconnected system to determine the least cost
option for the entire region. Based on the results of the IRP, fossil fuel
usage for electric generation in the Railbelt can be reduced from the
current 95% to 50% through the development of large hydroelectric,
geothermal and wind projects. The resulting capital cost for the Railbelt
electric generation and transmission infrastructure additions total
$7,290,000,000 over the next 20 years. The full report of the Railbelt
IRP is included in the attached DVD as Appendix 12.
The remaining areas of the state have limited, if any, interconnections
which led to a focus on the use of locally available fuels wherever
possible to meet energy needs for heat and electricity. An assessment
of possible options for each community was completed, yielding a
potential pathway for each community outside the Railbelt. The initial
deployment was unrestrained in the total amount of renewable energy
resource usage. During a second phase, projects which increased the
cost of energy were removed, resulting in a recommended community
resource development strategy that would deploy renewables where
economically feasible but continue using diesel as a major fuel source
for both electricity and heating.
Executive Summary
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Based on the results of the community deployment model (included in
the attached DVD as Appendix 2), the renewable percentage for electric
generation for non-Railbelt regions could be increased from the current
63% to 91% through the deployment of locally available renewable
resources. Similarly, the non-fossil fuel percentage for space heating
for non-Railbelt regions could be increased from the current 10% to
45%. This increase in non-fossil fuel sources will yield a corresponding
reduction in carbon dioxide emissions by 77% for electric generation
and 39% for space heating. Capital cost estimates were developed for
the regions outside the Railbelt to construct both electrical and space
heating infrastructure. The resulting capital cost for the non-Railbelt
electric and space heat infrastructure additions total $2,846,000,000
over the next 20 years. A full listing of the capital costs by region and
community is provided on the attached DVD in Appendix 3.
While these numbers are staggering, the cost of inaction is also
significant. For example, assuming a fuel demand at current levels for
the 176 largest communities in rural Alaska with a combined population
of 74,500 residents, these communities are on track to spend over $5
billion over the next 20 years on diesel fuel alone1. During the same
time period, the Railbelt will spend over $60 billion on fossil fuels for
electricity generation, transportation and heat if current Railbelt fossil
fuel demand is assumed2.
The largest identified challenge is how to finance projects that have
been identified as economic. There is a financial gap between the
projected capital expenditures and the debt capacity of the Railbelt
utilities. This gap is apparent in Figure 1, excerpted from the Railbelt
IRP document. The debt capacity curve indicates in 2031 a low
capacity of $1 billion and a high capacity of $2.5 billion. These debt
Executive Summary
capacities leave a Financing Gap from $4.5 billion to $6.5 billion for
the Railbelt electric infrastructure alone. There are three options to
close the financial gap:
1) Reduce capital expenditures by reducing the number and size of
projects.
2) Increase debt capacity by building a healthy economic base,
obtaining favorable financing terms such as loan guarantees, low
interest rates or grant assistance.
3) Obtain grant funding from state, federal or other outside sources.
In actuality, all three of these options will be pursued to close the
financial gap and allow for the construction of the energy infrastructure
in Alaska.
In addition to community and regional planning, this Pathway
recommends a number of actions to move Alaska toward greater energy
independence. It begins with a reaffirmation to meet 50% of Alaska’s
electric energy needs through renewable energy resources by 2025.
However, it also goes one step further: to achieve a 20% increase in
energy efficiency and conservation by 2020. Neither of these will be
easy to achieve, and both will require immediate and decisive action by
the elected leaders and ordinary Alaskans around the state.
Figure 1 taken from the Railbelt Integrated Resource Plan.
Footnotes:
1. based on ISER Community Diesel Price Projections (medium price scenario), Energy Pathway database current
fuel use, 3% interest rate, in 2007 dollars
2. based on Alaska Electric Power Statistics November 2003, REGA and RIRP fossil fuel price forecasts, Alaska
Energy Flow 2006, Transportation Energy Consumption by Energy Source without jet fuel 2007, 3% interest rate
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Specific actions identified in this plan include:
20% Energy Efficiency and Conservation Improvements by 2020
For meeting the goal of achieving 20% Energy Efficiency and
Conservation Improvements by 2020:
☼Continue the public education and outreach program to help
Alaskans improve energy efficiency and conservation at home and
at work.
☼Continue to develop an electrical efficiency program for residential
buildings.
☼Develop a pilot program for energy audits on all commercial and
public buildings.
☼Develop a pilot program for a small industrial facility energy audit
program.
☼Continue the Village Energy Efficiency Program to provide
technical assistance and retrofits to villages and small cities.
☼Support a loan guarantee fund to provide security and encourage
private sector lending for energy efficiency retrofits.
☼Establish baseline data for residential and commercial thermal and
electrical energy use and create a database to track progress toward
the 15% goal using the AKEnergyInventory.org GIS-based energy
database.
☼Support retrofitting of public buildings through performance
contracting or other means.
☼Develop and test innovative approaches to improving energy
efficiency in cold climates.
50% Renewable Energy for Electric Power by 2025
For meeting the goal of achieving 50% Renewable Energy by 2025:
☼Continue to fund the Alaska Renewable Energy Fund.
☼Expand the Power Project Loan Fund administered by the Alaska
Energy Authority to provide low-interest loans to economically
viable energy projects throughout the state.
☼Analyze the benefits and costs of a state corporate tax credit for
renewable energy production.
☼Develop an Emerging Energy Technology Grant Fund to invest in
applied energy research and pilot projects of emerging technologies
with near-term potential for Alaska.
☼Continue to support the creation of a Railbelt electric corporation
that will provide collaboration to plan, finance and construct future
energy infrastructure.
☼Conduct an Integrated Resource Plan for Southeast Alaska to
determine least cost options for generation and interconnections to
provide electric and heating needs.
☼needs.
Addressing Climate Change
Climate change is another topic that is closely related to energy
production and use. Under the direction of the Department of
Environmental Conservation, the State of Alaska is preparing a strategy
for mitigating emissions of greenhouse gases and for adapting to the
impacts of climate change. Approximately 15% of Alaska’s greenhouse
gases are estimated to be generated by electrical and heating energy
production. The remaining greenhouse gases are generated by other
energy sectors, including air and ground transportation and oil and gas
production.
Executive Summary
-
200
400
600
800
1,000
Current Short-Term Mid-Term Long-Term Stretch Goal
Greenhouse Gas Production from
Non-Railbelt Electric and Heat
(1,000's of Tons)
Electric
Heat
Figure 2. Greenhouse Gas Production from Non-Railbelt Electric and Heat
(1,000's of Tons)
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Renewable energy and energy efficiency deployment measures
recommended in the Alaska Energy Pathway will reduce greenhouse
gas emissions while achieving other goals such as reduced reliance on
fossil fuels, cost stabilization and economic development opportunities.
Energy Security
Energy security today and in the future is a significant concern for
Alaska. Our state is vulnerable to disruptions in its supply chain for
supplies and fuel, and increasing energy independence helps reduce
those vulnerabilities. Recommended actions to improve our energy
security include:
☼Expand efforts to increase renewable energy production in Alaska,
in order to meet the 50% by 2025 objective.
☼Expand efforts to increase energy efficiency to meet the 20% by
2020 objective.
☼Promote environmentally responsible development and delivery
of non-renewable resources for in-state use (oil, gas, and coal
exploration).
☼Create incentives for oil and gas exploration to increase throughput
and extend the life of the Trans-Alaska Pipeline.
☼Support expansion of electrical interties where economically
feasible.
☼Promote the use of local energy to support instate food production.
Economic Development
Economic development is a key consideration when implementing
future energy projects and building new infrastructure. Priority should
be placed on infrastructure that will support economic development in
Alaska, particularly related to industries that can supply high-paying
jobs to residents and encourage public/private partnerships. There are
several ongoing initiatives focused on addressing long-term economic
development for Alaska, and their findings will be critical to long-term
implementation of this Alaska Energy Pathway.
Recommended strategies related to energy and economic development
include:
☼Reduce imports to Alaska for energy, food, technology, and labor by
increasing energy efficiency and the production of local renewable
energy.
☼Develop state infrastructure using life cycle cost evaluation that
accounts for the construction, replacements, and operating costs
including the cost of energy.
☼Determine the “highest and best” use of resources to benefit
Alaskans.
☼Use the state as an economic development facilitator that leverages
Alaska’s wealth.
Investing in Innovation
Alaska faces very different conditions compared to elsewhere in the
U.S. in terms of environment, population density, and the isolated
nature of our electric generation and transmission system. One key
component to achieving the goals laid out in this Pathway is to invest in
near-term emerging energy technologies that can help meet our short-
term objectives for renewable energy and energy efficiency. Specific
recommended actions include:
☼Support a state Emerging Technologies Grant Fund to invest in
applied energy research and pilot projects of emerging technologies
with near-term potential for Alaska.
☼Support applied energy research at the University of Alaska.
☼Create a mechanism to capture “lessons learned” from research and
demonstration projects, making them available to the public and
industry.
☼Develop and maintain effective data collection tools and networks,
increasing energy information for use in assessing energy projects,
policy, and research.
Executive Summary
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Education and Workforce Development
In order to maximize our economic development potential, we must
invest in education and workforce development. Public education
will be critical to meeting the cornerstone objectives of 20% energy
efficiency and conservation improvements by 2020, and 50% renewable
energy for power generation by 2025. Specific recommended actions
for education and workforce development include:
☼Initiate a statewide education campaign geared toward meeting the
statewide target of 15% energy efficiency improvements by 2020.
☼Encourage the integration of energy, energy efficiency and
renewable energy curricula at all levels of education including
K-12, tech training programs, university and college, and
continuing adult education.
☼Complete an analysis of existing state job training and education
programs and identify gaps in the energy workforce including
technical training, engineering, managerial, education, and
community leadership.
Alaska’s Fossil Energy Future
Alaska’s oil and gas development for instate and export industries
has been the economic engine that has driven our economy over the
past several decades. Today, the State of Alaska receives almost 90%
of its general fund revenues from petroleum (royalties, production
taxes, property taxes, and corporate income taxes) and will remain
heavily dependent on these revenues for the foreseeable future. In
order to meet the objectives laid out in this Pathway for developing
Alaska’s renewable resources, we must continue to chart a course
toward development of our fossil energy resources. This is necessary
both to meet the immediate energy needs of Alaskans and to pay for
the infrastructure that will be part of a sustainable energy future for the
state. This includes supporting development of our oil, gas, and coal
resources. The following recommendations are related to continued
development of Alaska’s fossil energy resources:
☼Continue to work with Southcentral producers and utilities to
implement a strategy to increase natural gas supply for
Southcentral Alaska.
☼Continue to follow state law regarding advancement of a large
diameter natural gas pipeline effort.
☼Continue the Governor’s effort to design and permit a small
diameter natural gas pipeline that could assure access
to natural gas resources.
☼Encourage development of heavy oil and other technologies that
will maintain Trans Alaska Pipeline System (TAPS) throughput
and extend its operating lifetime.
Alaska is a large state. The disparity between energy costs in various
regions is enormous, far higher than that seen in any other U.S. state
and approaching levels more commonly seen in the Third World. When
this fact is put in context with our patchwork of isolated grids and
general lack of infrastructure, Alaska is clearly in a unique position, in
that energy policy successfully enacted in other places may not apply
to our state. In our dispersed population and limited infrastructure, we
represent Second and Third World countries, but in our energy use we
are rivaled by no one in the developed world. Our situation is unique,
and as such the solutions we seek must be unique, as well.
This Pathway does not present a single solution, but rather presents a
roadmap which, if followed, can result in a partial solution. Alternative
energy is not an easy solution. It is not a cheap solution. But where
practicable, it is a sustainable solution. The purpose of this report
is to empower Alaskans at the community and regional levels to
participate in finding the solutions that are right for themselves and
their neighbors, and provide them with the tools to make smart choices
about the direction their community heads. Energy is a larger issue than
the cost of electricity or heating oil; it is intricately tied to Alaska’s
various economies, and those economies are tied to the social health of
a community and the state.
Executive Summary
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This document sets the framework for local action and develops an
overall state strategy. It will be up to all Alaskans to work toward
implementing these actions.
Executive Summary
Unalakleet wind turbines installed as
part of the Renewable Energy Fund.
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20% Energy Efficiency and Conservation Improvements by 2020
The Alaska Energy Pathway highlights the need for investment in
energy efficiency and conservation, which is the fastest, least expensive
way to reduce energy cost. Improving energy efficiency will allow
communities to save money, be better positioned for renewable energy
generation, and be more sustainable in the future. A multitude of
mature and proven efficiency technologies are available but little used
across Alaska, even though Alaska has some of the highest energy
prices in the nation.
This suite of programs fills the major gaps in service delivery and
augments existing programs. For example, the Alaska Housing Finance
Corporation manages the successful Weatherization and Home Energy
Rebate Programs that focus on energy efficient building envelopes and
heating systems. To complete residential sector efficiency, an electrical
efficiency program is proposed to significantly reduce electrical loads
in homes in a cost-effective manner.
The two largest remaining gaps in energy efficiency and conservation
service delivery are 1) efficiency in workplaces, and 2) a multi-
disciplinary public education and outreach campaign.
Energy Efficiency and Conservation in Workplace Buildings
Alaska workplaces, including public buildings, commercial buildings,
and small industrial buildings, collectively use more energy than
all the residential buildings in Alaska and have many opportunities
to use energy more efficiently. With federal stimulus funds, AEA is
designing and piloting a commercial and public building energy audit
program in 2010. This program is designed to overcome the primary
hurdle to action: educating building owners and managers about the
specific efficiency opportunities that exist within their buildings and
the return on investment that could be achieved if the measures were
implemented. In addition to the audit, low interest loans, rebates,
and incentives would encourage investment in energy efficiency and
conservation.
Energy efficiency and conservation outreach and education
There are a large and growing number of viable energy efficiency
technologies available today. A comprehensive public education
campaign and easy access to good information is essential for assisting
Alaskans to make educated choices that increase efficiency and
conservation. The AEA and more than a dozen partnering agencies
and organizations have formed an Energy Efficiency and Conservation
Working Group to design this outreach and public education program.
At its center is a new website www.akenergyefficiency.org that will
serve as a single one-stop-shopping reference for energy efficiency
information. The site will direct visitors to resources available for
energy efficiency in Alaska, from both state and non-state entities alike.
Alaska’s energy efficiency initiatives will be symbolized by the new
graphic image, below. This symbol will be used by all the efficiency
stakeholder groups to demonstrate a consolidated effort toward
improving energy efficiency and conservation efforts statewide, and to
direct people to the website, which will act as the effort’s hub.
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20% Energy Efficiency and Conservation Improvements by 2020
Recommended Actions – 20% Energy Efficiency and Conservation
Improvements by 2020
☼Continue the public education and outreach program to help
Alaskans improve energy efficiency and conservation at home and
at work.
☼Continue to develop an electrical efficiency program for residential
buildings.
☼Develop a pilot program for energy audits on all commercial and
public buildings.
☼Develop a pilot program for a small industrial facility energy audit
program.
☼Continue the Village Energy Efficiency Program to provide
technical assistance and retrofits to villages and small cities.
☼Support a loan guarantee fund to provide security and encourage
private sector lending for energy efficiency retrofits.
☼Establish baseline data for residential and commercial thermal and
electrical energy use and create a database to track progress toward
the 15% goal using the AKEnergyInventory.org GIS-based energy
database.
☼Support retrofitting of public buildings through performance
contracting or other means.
☼Develop and test innovative approaches to improving energy
efficiency in cold climates.
Left: Caulking the Nightmute
Community Hall. Right: Insulation
being installed into a roof space of a
residence in Fairbanks.
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50% Renewable Energy by 2025
A renewable energy goal was established in 2009, of meeting 50%
of Alaska’s electrical energy needs from renewable sources. This
document describes policies and community-by-community scenarios
that could move the state to this goal and beyond.
Alaska is already meeting 24% of its electric power generation
from renewable resources, almost all of which is from hydropower
installations across the state.
The Railbelt region of the state currently generates about 11% of its
electric energy needs from renewable sources. This renewable energy
is mainly derived from the Bradley Lake, Cooper Lake and Eklutna
hydroelectric projects. The Railbelt Integrated Resource Plan deployed
large hydroelectric, wind and geothermal resources to obtain the 50%
renewable energy scenario. The complete Railbelt Integrated Resource
Plan (IRP) is included in Appendix 12 and is summarized on page 32 of
this report. The Railbelt IRP uses a classical electrical system approach
to derive the least cost option for the electric needs, and no analysis was
conducted on the heating needs of the Railbelt. It is assumed that due to
the extensive infrastructure for natural gas delivery in Anchorage that
natural gas will continue to be the main source of space heating energy
for South Central Alaska for the long-term future. Interior Alaska is
heavily dependent on liquid fossil fuels for space heating. The Interior
will likely shift to natural gas use once gas is made available and the
necessary infrastructure is developed. Biomass and coal are expected
to continue to be a part of the Interior’s space heating portfolio into the
long-term future.
The regions outside the Railbelt currently exceed the renewable target
with 63% of their electric energy being created from renewable sources.
Again, the current renewable energy sources are mainly hydroelectric
facilities in Southeast Alaska, but also include wind and biomass in
many areas across Alaska.
The Community-by-Community Deployment model, included in
Appendix 2, suggests a pathway for each of the 227 non-Railbelt
communities to use renewable resources. The results of this model
indicate that in the long-term, renewable resources will account for
91% of electrical needs in non-Railbelt Communities. The reduction in
gallons of diesel fuel electricity in the non-Railbelt regions (Figure 2)
from the current 35 million gallons per year to the long-term 7.5 million
gallons is graphically shown.
The possible reduction of diesel fuel for space heating in non-Railbelt
areas is shown in Figure 3 which suggests that consumption can be
reduced from the current 60 million gallons per year to 35 million
gallons. The model shows that, currently, renewable resources account
for 10% of the energy needed for space heating in non-Railbelt
communities. It predicts that in the long term this will increase to
45%. The inclusion of space heating adds a whole new dimension to a
Renewable Portfolio Standard (RPS), as current RPS targets that have
become popular in the U.S. are only for electric energy production.
With some of the best renewable resources in the world, Alaska is
better prepared than most places to meet this challenge. The renewable
technology deployments in the model are based on proven technologies,
such as hydropower, wind, biomass and geothermal power. Emerging
technologies that will likely become commercially viable in the next
decades could use previously untapped resources such as tidal, wave
and in-river hydro energy.
14
Recommended Actions – Roadmap to 50% Renewable Energy by 2025
☼Continue to fund the Alaska Renewable Energy Fund.
☼Expand the Power Project Loan Fund administered by the Alaska
Energy Authority to provide low-interest loans to economically
viable energy projects throughout the state.
☼Analyze the benefits and costs of a state corporate tax credit for
renewable energy production.
☼Develop an Emerging Energy Technology Grant Fund to invest in
applied energy research and pilot projects of emerging technologies
with near-term potential for Alaska.
☼Continue to support the creation of a Railbelt electric corporation
that will provide collaboration to plan, finance and construct future
energy infrastructure.
☼Conduct an Integrated Resource Plan for Southeast Alaska to
determine least cost options for generation and interconnections to
provide both electric and heating needs.
50% Renewable Energy by 2025
Figure 3. Non-Railbelt Diesel Use for Heat (gallons per year)Figure 2. Non-Railbelt Diesel Use for Electric (gallons per year) Galllons per yearGalllons per year
15
Energy Security and Its Implications For Alaskans
Greater energy independence for Alaska is more than an economic
issue. It is an issue of state energy security. Energy security ensures
that energy needs will be met in a reliable and affordable manner
in the decades to come. This energy is used to heat our homes,
produce electricity, and fuel our vehicles. But we also need energy to
manufacture, grow, and produce all the goods and services essential to
maintaining our quality of life. The geographic positioning of Alaska
creates extended distances from current manufacturing or production
facilities. These long distances increase our vulnerability to disruptions
in supply chains of energy and non-energy related imported goods.
Alaska’s renewable energy resources provide a local source of
predictably priced energy that is less susceptible to fluctuations in
fuel price and reduces the exposure to potential future carbon dioxide
regulation. Increased certainty in energy prices helps to attract investors
to the state and can make the state more competitive in the global
economy. By using local natural resources, renewable energy systems
often keep more dollars circulating within the local economy - a key
advantage especially for rural communities.
Energy
A secure and reliable delivery system for fossil fuel energy to Alaska
can be a challenge for both imports and in-state utilization of fossil
fuels. The key to a secure supply chain is redundancy in infrastructure.
In-state refiners rely on pipeline or tanker delivery systems to
provide the necessary crude oil. Long-term disruptions in the
supply systems can create energy shortages unless adequate
storage alternative delivery systems are available for the crude
oil and the refined product.
Many parts of rural Alaska have limited seasonal access and
must rely on one or two fuel deliveries each year and storage of
the fuel between deliveries. Alternative deliveries may become
necessary if inclement weather impedes delivery or stored fuel
is destroyed.
Trans-Alaska Pipeline
at Fox, Alaska
16
Food
The majority of food Alaskans eat comes from outside the state. It
typically travels many thousands of miles, with fossil fuels providing
the energy for delivery. If national energy sources are disrupted by
war, terrorism, natural disaster, or other events, these important food
supplies would also be disrupted. Fortunately, there is a basic level of
storage capacity, so if a supply chain is interrupted, alternative means
such as planes or vessels could be utilized to reestablish the food
delivery prior to a shortfall.
Energy Security and Its Implications for Alaskans
Recommended Actions – Energy Security
☼Expand efforts to increase renewable energy production in
Alaska, in order to meet the 50% by 2025 objective.
☼Expand efforts to increase energy efficiency to meet the 20% by
2020 objective.
☼Promote environmentally responsible development and delivery
of non-renewable resources for in-state use (oil, gas, and coal
exploration).
☼Create incentives for oil and gas exploration to increase
throughput and extend the life of the Trans-Alaska Pipeline.
☼Support expansion of electrical interties where economically
feasible.
☼Promote the use of local energy to support in-state food
production.
Tomatoes grown using geothermal
energy at Chena Hot Springs, outside
of Fairbanks, Alaska
17
2. Sustainable Economy
Development of a diversified economy is critical for a stable sustainable
future for Alaska. A sustainable economy requires labor, energy,
infrastructure, financing, management, and a market. Sustainable economic
development can be achieved when there is an increase in the amount of
money flowing into an area versus a negative net outflow of money out of the
same area.
3. Infrastructure Development
Projects must be critically analyzed using life-cycle costing to identify
the source of funds needed to cover the ongoing expense and to assure
replacement at the end of its useful life. The useful life of infrastructure can
last decades - so this analysis must reflect the impact that this infrastructure
will have on future generations. When capital funds are plentiful, the
selection and evaluation process may be less critical. Conversely, when
capital funds are limited, care must be taken to select projects that provide
the largest benefit for the dollars spent and to select projects with affordable
costs of ongoing operations.
4. Highest and Best Use of a Resource
Communities should participate in forums to determine the highest and best
use of Alaskan resources to maximize opportunities in the long-term for
themselves, their children, and their grandchildren. The communities should
also determine and select industries that will develop opportunities for their
citizens. These forums could incorporate the various planning processes that
a community undertakes, such as energy, comprehensive, land-use, or other
forms of planning.
5. Public/Private Partnerships
Find ways to promote the strengths of both the public sector and the private
sector. Develop a culture of balancing risk with rewards and opportunities
to share calculated risks. Build on the strengths of all parties to ensure the
best performance from all. We should identify ways to reward Alaskan-based
companies that provide Alaskan opportunities and proactively address a
regional or community-based economic development approach.
6. State as an Economic Facilitator
The state can play a key role in the evaluation and facilitation of
technologies, community discussions, and vision development.
Economic Development
What is Important for Economic Development
Reduction of the cost of energy is one of the main drivers for this
Energy Pathway document. Many Alaskans are struggling to make
ends meet, so simply reducing the cost of energy would appear to be an
acceptable result. Unfortunately, this Alaskan dilemma is intertwined
with several other issues that are directly related to income, opportunity,
wealth retention, geographic location, economies of scale, and the
collective community vision of Alaska.
Historically, Alaska is viewed as the Last Frontier and a land of
opportunity. People will continue to come to Alaska, its regions and
communities as long as opportunities exist and as long as optimism
prevails. When opportunities cease, people will look for opportunity
elsewhere.
The state must strive to create opportunities whenever Alaska’s money is
spent. Expenditures of state funds should create opportunities that will:
☼Share Alaska’s wealth with Alaskans
☼Retain wealth in Alaska
☼Retain Alaskans for generations
☼Build Alaskan careers (with an adaptable, trained workforce that
can adjust to labor market changes)
☼Diversify our economy
☼Export value-added products
☼Provide environmentally responsible development
☼Provide fiscal predictability
☼Provide measurable results and benchmarks
Six Economic Development Strategies
1. Reducing Imports
One strategy to retain money is to substitute imports with locally derived
alternatives or reduce imports for our energy, food, technology, labor,
or services when it makes economic sense. The concept of import
substitution with locally derived, value added goods and services is a
fundamental strategy for economic development.
18
Economic Development
The Rain Barrel
Due to its geographic isolation, Alaska is dependent upon outside
suppliers for many goods and services associated with its economy.
Basic goods, such as food, electronics, clothing and other consumer
goods are derived primarily from outside of Alaska, with a shortage of
locally available goods and products.
Due to its dependence on external goods, Alaska’s economy can be
likened to a rain barrel. Money flows into the barrel as value-added
products or services are sold to others outside the economic zone, or
money is provided from governmental sources. Money that is used to
purchase goods and services from outside the economic zone will drain
the dollars from the Alaskan economy.
Due to our heavy reliance on imports, we know the money expended
in Alaska leaves in a short time frame. Every time consumers or local
firms buy goods or services from outside the state, the money leaves
Alaska. Local wages stay around a little longer, until they purchase
items from outside Alaska. Alaska’s import purchases can be for
energy, resources, food, technology, labor, leadership, or services.
Money flows into the barrel in two ways:
☼When a product is sold to an outside customer.
☼When dollars are brought in from outside sources.
Money flows out of the barrel in five ways:
☼Local firms buy their goods from outside sources.
☼Local households go out of town to buy goods and services.
☼Local employees pay taxes and social security to higher
government units.
☼Community citizens, local firms, and local investors spend local
resources on ventures that don’t pay off.
☼Community citizens invest their dollars in outside ventures instead
of local business opportunities.
Using the Rain Barrel
For example, money would flow into the rain barrel if the federal
government provided a funding source for a wind turbine to be
installed in Alaska. Purchasing a wind turbine from a source outside
of Alaska would import the wind technology, intellectual capital,
and manufacturing labor. Alternatively, a locally manufactured wind
turbine would eliminate import substitution and create opportunities for
a value added, export product. Admittedly, we cannot instantly create a
self-reliant Alaska, but we could start with a development model to first
operate and maintain; then assemble and construct; with the ultimate
goal of being a net exporter.
Rain Barrel Model
Determine ways to retain
dollars in the economy by
reducing the dollars leaving
the economic Rain Barrel.
Determine ways to increase
dollars into the economy.
Figure 4. Rain Barrel Model1.
1. Publication 1646. Extension Service of Mississippi State University, cooperating with U.S. Department of Agriculture.
Published in furtherance of Acts of Congress, May 8 and June 30, 1914. Ronald A. Brown, Director
19
Recommended Actions – Economic Development Strategies
☼Reduce imports to Alaska for energy, food, technology, and
labor by increasing energy efficiency and the production of local
renewable energy.
☼Develop state infrastructure using life cycle cost evaluation that
accounts for the construction, replacements, and operating costs
including the cost of energy.
Economic Development
“On economic policy, I will not be constrained by a short-term view of
our economy, but instead will focus on Alaska’s future. We will build
a legacy economy, for this generation and the next. Ten years from
now, I want it said that Alaska inspires and grows dreams. I want it
said that in Alaska our young people can see and seize opportunity for
themselves. I want Alaska to be a place where owning a small business
leads to greater financial security, and where larger businesses look at
us as a great place to invest and create jobs.”
Governor Sean Parnell
☼Determine the “highest and best” use of resources to benefit
Alaskans.
☼Use the state as an economic development facilitator that
leverages Alaska’s wealth.
20
Investing in Innovation
Alaska faces very different conditions compared with elsewhere in
the U.S. in terms of the environment, population density, and isolated
nature of electrical generation and transmission systems. One critical
step to utilizing our resources, overcoming our unique challenges, and
implementing energy solutions for Alaskans is to invest in applied
energy research.
Applied research is aimed at developing technologies for immediate
use, centering on producing innovative, cost-effective, reliable, and
locally appropriate technologies. To date, energy funding opportunities
in Alaska, such as the Renewable Energy Fund, focus on “off-the-
shelf” technologies that have already been developed and demonstrated
in Alaska or elsewhere, and are not designed to invest in the next
generation of energy technologies.
Many of the best energy solutions come from Alaskans, who are
in the best position to understand the available resources as well
as the specific issues related to energy production and use in their
communities. However, to move these ideas from the drawing board into
practical application requires funding, and money for non-commercial
technologies is often not readily available. The strength of innovation
is demonstrating a new way of doing things, a way that challenges
current trends and institutional thinking. However, these types of
projects require taking risks – risks that traditional funding sources are
often unwilling to accept because the rate of failure is higher than more
traditional, off-the-shelf commercial technologies. One current state
proposal would create an Emerging Energy Technology Fund (EETF),
providing grant opportunities for both fossil energy and emerging
Recommended Actions – Investing in Innovation
☼Support a state Emerging Energy Technologies Grant Fund to invest
in applied energy research and pilot projects of emerging energy
technologies with near-term potential for Alaska.
☼Support applied energy research at the University of Alaska.
☼Create a mechanism to capture “lessons learned” from research and
renewable energy projects. Alaska is an ideal test bed for emerging
energy technology. Given our abundant energy resources, the high cost
of energy, and the variation in climate and landscape, projects can prove
financially viable, even in the research and demonstration phases. An
EETF would link technology developers with potential end-users to seek
specific solutions to Alaska’s energy challenges.
This type of support for applied energy research in Alaska would assist
in:
☼ Addressing specific Alaskan energy issues.
☼ Supporting pre-commercial energy technologies, or commercial
technologies that have not been demonstrated in Alaska.
☼ Demonstrating commercial success of new energy technologies.
☼ Showcasing technologies that have the potential for developing
export markets for Alaskan products, ideas, and expertise.
There are other opportunities for investment as well, such as expanding
funding for existing energy research programs in the state, including the
University of Alaska, as well as private non-profit organizations such as
the Cold Climate Housing Research Center. Job training, education, and
governance can also benefit from targeted investment and support.
By funding applied energy research as part of the state’s overall
investment in energy projects, Alaska has the opportunity to truly
become a leader on the world stage in energy development in a manner
that can provide stable, affordable energy throughout the state while
simultaneously developing economic opportunities for its residents and
its industries.
demonstration projects, making them available to the public and
industry.
☼Develop and maintain effective data collection tools and networks,
increasing energy information for use in assessing energy projects,
policy, and research.
21
Investing in Education and Workforce Development
Job creation and workforce development drive sustainable
economic growth, especially in a world where technology
and industry advance at lightning speed. As the pathway
is put into effect, many of the future energy industry jobs
will be in the renewable energy sector.
In order to achieve the goals laid out in this document, we
will need to educate all Alaskans. The state must make
the investment in educating its citizens, energy industry
professionals, and community leaders for their respective
roles in Alaska’s energy future. By educating today’s
youth about strategies and behaviors to both conserve and
use energy efficiently, we can have an immediate impact
on our energy consumption. The state must cultivate
its youth as skilled laborers, engineers, economists, or
educators for tomorrow’s energy economy.
In the near term, the state needs to continue support for
energy-related training programs, such as AVTEC and
the various University of Alaska critical energy-related
skilled-labor education programs. But to achieve our
vision of a more energy-independent Alaska, we must
have other energy industry professionals to design, fund,
manage, and execute the plan. We must educate that
future workforce to ensure that those energy-related jobs
Recommended Actions – Education and Workforce Development
☼Initiate a statewide education campaign geared toward meeting the
statewide target of 15% energy efficiency improvements by 2020.
☼Encourage the integration of energy, energy efficiency and
renewable energy curricula at all levels of education including
K-12, tech training programs, university and college, and
continuing adult education.
are held by Alaskans and that career opportunities
will exist to sustain our communities. To develop
an export market for Alaskan products, ideas, and
expertise, we must have an educated workforce
and a strong university system and research
programs to foster innovation.
In the end, implementation of this plan will occur
at the local level. To move economically viable
projects from the drawing board to completion,
local project champions are needed – people who
are committed to taking the time to work toward
developing energy solutions for their community.
These community leaders exist throughout the
state in the Native leaders, utility leaders, and local
governments. It will be necessary to provide these
key individuals with the tools and know-how to
transform their enthusiasm and hard work into
economically successful energy projects for their
communities.
☼Complete an analysis of existing state job training and education
programs and identify gaps in the energy workforce including
technical training, engineering, managerial, education, and
community leadership.
Students training to be mechanics.
22
Children playing in Nightmute.
Nightmute is a recipient of the pilot
program ‘Whole Village Energy
Efficiency Retrofit,’ administered by
the Alaska Energy Authority.
23
Alaska’s Fossil Energy Future
Alaska holds about half of America’s remaining proven oil reserves,
almost a quarter of its traditional natural gas reserves, and over half of
its coal resources. When unconventional oil and gas resources such as
viscous oil, coal bed methane, and methane hydrates are factored in, the
potential energy resources of Alaska dwarf the combined resources of
all of the other 49 states. Development of these resources to meet the
near-term needs of Alaskans, and delivering these resources to market
is critical to accomplishing the goals laid out in this plan.
Access to our natural gas resources
Alaska is on track to finally access the natural gas resources of the
North Slope. Right now, Governor Parnell has a team of engineers
performing preliminary design work to advance a bullet line with the
potential to provide natural gas to thousands of homes and businesses.
We are also making historic progress on a large diameter pipeline to be
constructed under the Alaska Gasline Inducement Act that can serve
these in-state needs and underpin our economy for the next 50 years.
By remaining focused on these two equally important projects, our
chance of achieving success that creates jobs for our families and serves
the energy needs for the majority of Alaskans will be greatly increased.
Access to the abundant natural gas reserves of the North Slope will not
only help to meet the state’s energy needs and fuel the state treasury,
it would also provide the raw material for potential value added
industries.
While on the decline, state geologists believe Cook Inlet natural
gas fields contain sufficient volumes to meet the near-term needs of
Southcentral Alaska. Companies are investigating incentives that may
assist the economics of exploring for more natural gas in the basin. Use
of recent directional drilling techniques and the possibility of a new
jack-up drill rig in the basin are under consideration. In addition, gas
storage for the basin will be developed to smooth out seasonal demand
swings.
Trans-Alaska Pipeline System
The declining oil production from the North Slope oil fields is also
of concern, as state revenues are directly tied to this flow. The Trans-
Alaska Pipeline System (TAPS) needs a minimum flow of about
300,000 barrels per day to remain viable, so encouraging additional
exploration, development of new fields and techniques, and production
of heavy oil remain a priority.
Outer Continental Shelf (OCS) development and conversion of natural
gas or coal to liquid fuels for transportation have also been suggested
as a way of providing additional product flow for the TAPS system.
Gas-to-liquid (GTL) and coal-to-liquid (CTL) production is a way
of converting relatively low-value feedstocks into high-value liquid
petroleum products. However, high capital costs and concern over
possible greenhouse gas restrictions have prevented any of these
projects from moving past the conceptual stage.
24
Alaska’s Fossil Energy Future
Other Opportunities to Develop our Fossil Energy Resources
Other smaller scale projects have been proposed to deal with local
energy issues, including developing propane as a fuel to replace diesel
in remote villages, and shipping liquefied natural gas (LNG) from
the North Slope to Fairbanks, as well as for export. In addition, at
least 35 towns and villages have been identified that are close to coal
seams that could potentially benefit from coal or coal bed natural gas
for local or regional energy needs. Lack of economies of scale for
power plants and transmission options prevents development of these
localized resources at this time. However, continued improvements
in technology could lead to small-scale coal utilization, including
underground coal gasification, development of coal bed methane,
Recommended Actions – Fossil Energy
☼Continue Governor Parnell’s effort to design and permit a
small diameter natural gas pipeline that could assure access
to natural gas resources.
☼Continue to work with Southcentral producers and utilities to
implement a strategy to increase natural gas supply for
Southcentral Alaska.
☼Continue to follow state law regarding advancement of a large
diameter natural gas pipeline effort.
☼Encourage development of heavy oil and other technologies
that will maintain Trans-Alaska Pipeline System (TAPS)
throughput and extend its operating lifetime.
☼Work to develop state fossil energy resources away from
current field areas by facilitation of new infrastructure,
streamlined regulation and incentives, and working with our
federal colleagues to maximize responsible resource
developement in NPR-A and the federal OCS.
☼Continue to develop a surface transportation plan that will
improve the economics of finding and producing oil and gas
from the Foothills Region of the North Slope.
☼Support efforts to permit oil and gas exploration and
development from the Outer Continental Shelf of Alaska.
☼Aggressively advocate for sensible federal permitting of
development of oil and gas from the National Petroleum Reserve
– Alaska.
barge-mounted coal-fired power plants, and above-ground coal
gasification that might economically compete with diesel-fired
generation in the not-too-distant future.
Funds have been secured to perform a feasibility study to site a gas to
liquids plant somewhere in the Railbelt to possibly produce ultra clean
diesel and aviation fuel. It may also be possible to supply such a plant
with gas derived from Alaska’s abundant coal reserves. Technology has
been developed that allows coal to be gasified in place, underground,
producing a resource called synthesis gas, or syngas.
25
Regional Energy Planning
Regional Approach
Alaska is a large state, with diverse resources and energy needs. For this
reason, we felt it was necessary to consider a potential future pathway
to meet the immediate and long-term energy needs of each individual
community in the state separately before considering the bigger picture.
This approach not only allows residents of individual communities to get
a sense for how development of projects in their community can influence
long-term energy costs for residents, but it also allows us to calculate
the total investment needed statewide to develop all energy projects that
have been identified as economically viable. This number totals almost
$7.3 billion for the Railbelt region, and $2.9 billion for the rest of the
state. If all of these proposed projects were constructed, it would increase
renewable energy as a percentage of overall power generation for the non-
Railbelt regions of the state to 91% from the current level of 63%, and
increase use of renewables on the Railbelt to over 50% from a current level
of less than 10%. These results are includes in Table 1 below, and broken
out into regions as defined by existing regional native corporations.Table 1. Capital Cost Rollup.
Native Corporation
Immediate
(0-10 Years)
Short-Term
(1 - 3 Years)
Mid-Term
(2-10 years)
Long-Term
(5 -15 Years)
Stretch-Goal
(15+ years)
Capital Cost
per Capita
Capital Cost Rollup
Capital Cost
per Region
Ahtna, Incorporated $9,883,000 $18,961,000 $41,925,000 $14,698,000 $34,710$103,923,000$18,456,000
Aleut Corporation $24,104,000 $34,481,000 $359,690,000 $0 $59,918$438,484,300$20,209,300
Arctic Slope Regional Corp.$22,252,000 $29,020,000 $0 $0 $14,636$98,621,461$47,349,461
Bering Straits Native Corp.$30,862,000 $49,560,000 $158,950,000 $0 $29,952$280,504,382$41,132,382
Bristol Bay Native Corporation $24,011,000 $65,871,000 $220,744,000 $1,467,000 $51,569$375,171,468$63,078,468
Calista Corporation $81,189,800 $65,708,000 $160,031,000 $1,277,000 $17,263$424,414,506$116,208,706
Chugach Alaska Corporation $23,126,000 $41,150,000 $37,617,000 $0 $17,894$125,634,592$23,741,592
Doyon, Limited $23,079,600 $50,777,000 $104,062,500 $18,142,447 $32,349$226,320,143$30,258,596
Koniag, Incorporated $30,266,100 $28,451,000 $63,861,000 $3,068,760 $13,789$126,549,309$902,449
NANA Regional Corporation $23,487,000 $29,195,000 $46,339,847 $3,607,000 $21,858$155,915,626$53,286,779
Sealaska Corporation $222,371,300 $98,123,000 $162,172,408 $2,505,248 $8,040$542,981,052$57,809,096
$514,631,800 $511,297,000 $1,355,392,755 $472,432,829 $44,765,455Rural Region Totals $27,453$2,898,519,839
$1,485,000,000 $940,000,000 $2,631,000,000 $2,959,000,000 $760,000,000Railbelt Region $16,200$7,290,000,000
$1,999,631,800 $1,451,297,000 $3,986,392,755 $3,431,432,829 $804,765,455Statewide Totals $43,653$10,188,519,839
26
Regional Methodology
In order to develop the numbers included in Table 1, we divided the state into two regions, and used slightly different approaches for each. For the
Railbelt region, extending from Homer to Fairbanks and including the major metropolitan areas such as Anchorage and the Mat-Su Valley, we used
a traditional Integrated Resource Plan that is detailed on page 32, with the full plan included on the DVD accompanying this publication.
The second region encompasses the rest of state, including rural Alaska, the southeast region, and communities located on the road system that have
their own, isolated electric grid. This process included 227 communities that were treated on an individual basis, and then grouped into geographic
regions based on native corporation regions as shown in Table 1. The end result includes a deployment pathway extending from today into the
future for each community, which could not be included as a printed version as the final results would encompass many hundreds of pages. Instead,
they are included on the DVD accompanying this publication, and are also available on the AEA website at www.akenergyauthority.org. To provide
a sample of the output, we have included the results for Kipnuk, which is included on the following pages and provides a sample of information
included on the DVD for each non-Railbelt community in the state.
Community Deployment Pathway
The community deployment pathway is summarized for each community in Appendix 1. Appendix 4 includes the generic deployment strategy
for available resources and includes the definitions and conditions for each deployed technology. The community deployment summary shows
the percentage of energy for each term, the capital investments to achieve that energy mix for that term, and the resulting cost of energy after
deployment. A more detailed energy summary and deployment pathway for each non-Railbelt community is provided in the expanded community-
by-community assessment in Appendix 2. The cost of energy numbers indicate the ability of renewable energy resources to compete in the long-
term, as they are based on the provisional crude oil cost of $107.50/barrel.
The detailed community report has four sections as shown in Appendix 12:
☼ Community Information
☼ Deployment Summary
☼ Current Energy Status
☼ Specific Technology Details
The first section includes basic information about the community. The second section, shows deployment summary for that community. The third
section shows current energy status, the cost of electricity, heat, and transportation diesel fuel based on the provisional cost of $107.50/barrel
of crude oil, priced as a delivered cost of diesel fuel to each community. The fourth section contains detailed costing and sizing information for
deployed technologies for the terms from immediate to stretch goal. The estimates are considered high level and will need to be refined for each
community in advance of budgeting or construction.
Regional Energy Planning
27
Regional Energy Planning
27
Explanatory Notes:
Shown here is an example of the
deployment pathway for Kipnuk,
which for the purpose of this
document has been designated a
“Wind Only” community.
The amount of wind energy that can
be produced at any time versus the
total amount of energy produced
is called penetration. Penetration
is a limiting factor to every wind
energy system and depends on the
local wind resource. Our community
model takes this dependency
into account and limits the wind
energy production. The wind
energy production is based on the
community’s designated wind class.
The decision to determine when to go down the pathway can be based on several factors, such as economics, climate change, community desires
to reduce emissions, or an economic development strategy. We will be focusing on the economics of projects compared to a 20-year average
projected fuel price of $107.50/barrel equivalent. For our analysis, we used the 20-year average (2010-2030) of the 2009 Energy Information
Administration (EIA) projection, or $107.50 per barrel. The final section of the community detailed report compares the cost of deployed
technology to the cost of energy based on the average projected fuel cost equivalent. If the cost of energy is lower for a deployed technology when
compared to the cost of energy at that time, it would indicate an economic opportunity for deployment.
The cost estimates contained in this report were conducted at the conceptual level with no site-specific design or scope development. Cost
estimates were based on similar historical energy projects constructed in Alaska, vendor estimates, and historical reports and studies for specific
applications. These high-level conceptual design cost estimates are based on the best data currently available. Detailed site-specific cost estimates
must be completed prior to project selection to determine more accurate values.
It must be emphasized that the energy deployment scenario for each community is not a definite plan set forth by AEA, but a general proposed
pathway based on the best information available to AEA’s program managers. The intent is to stimulate discussion on community energy planning,
and provide rough cost estimates of community-scale projects. Individual communities must decide for themselves what their energy development
strategy should be, and how best to use local renewable energy resources for their community’s benefit.
[1]
[2]
[1]
[3]
[5]
[4]$0.40
28
Regional Energy Planning
28
29
Regional Energy Planning
% mix for electricity (kWh) used in the community
based on resources, technology, and economics.
$/kWh resulting cost of electricity (not including
subsidy) based on provisional $107.50/bbl equivalent
fuel prices delivered to specific community.
% energy mix for heat based on resources, technology,
and economics.
Resulting cost of heat per mmBTU based on
provisional $107.50/bbl equivalent fuel prices
delivered to specific community.
Current community electricity demand information
estimated from both recent utility-reported and
historical data. Current space-heating energy demand
information estimated from several variables,
including communtiy-specific population and climate
information.
All diesel fuel costs are based on the 20-year
Department of Energy, Energy Information
Administration average price of crude oil of $107.50
per barrel, converted to diesel fuel and delivered to
the specific community.
Capital expenditure for electric plants.
Capital expenditure for heat plants.
29
30
Regional Energy Planning
Power plant heat recovery.
Heat recovery can provide community cost savings
through the use of heat that would be rejected from a
diesel electric generating power plant. The value of
the recovered heat is set at approximately half the cost
of the diesel equivalent. The savings are determined
through subtraction of the annual cost to recover the
heat from the annual value of the heat.
Power plant upgrades.
Power plant upgrades can range from low cost
remedial actions through the technical assistance
program, to complete power plant replacement. The
projects are shown with loans for all capital costs.
If grants are obtained the cost per kilowatt hour for
annual costs can be reduced by the percentage of
grant as a method to rapidly determine the resulting
energy cost.
Consumer efficiency and conservation.
The cost for efficiency increases and conservation
measures for electricity is $800 per capita and $2,500
per capita for heat. The amount of cost reduction is
based on a 20% reduction in fuel usage. A positive
savings indicates the per capita investment is
appropriate for the resulting cost savings. A negative
number indicates the per capita amount should be
reduced and focused on the most cost effective
efficiency and conservation measures.
30
31
Regional Energy Planning
Short, Mid-term, and Long-term Options.
Options are presented in resulting dollars and per
unit of energy being produced. The annual capital
costs assume loans have been obtained for project
funding. A loss indicates a community may delay this
investment loan funded project until higher fuel costs
have developed, or obtain grants to reduce the debt
component of the resulting energy costs.
31
32
Regional Energy Planning
Recommended Actions – Railbelt
☼Continue to support the creation of a Railbelt electric
corporation that will provide collaboration to plan, finance and
construct future energy infrastructure.
☼Encourage Railbelt utilities to implement recommendations from
the regional IRP.
Railbelt Integrated Resource Plan
The Railbelt electric grid, which runs between Homer and Fairbanks,
was evaluated using a traditional approach for interconnected systems
called an Integrated Resource Plan (IRP). A summary of results from
the study is shown in Table 1, and a full copy of the report is included in
the Appendices.
The Railbelt IRP was developed in 2009 for AEA by Black and Veatch
Consultants. The goal was to address several current and anticipated
issues related to power supply and demand for the Railbelt electric grid,
including:
☼Assessing the demand for electricity projected for the Railbelt
over the next 50 years.
☼Potential future generation resources and their related capital,
fuel, and operating costs. The Railbelt’s existing electrical
generation fleet is aging, and many plants are approaching the
end of their design lifetime, and will need to be replaced over the
next 20 years.
☼How the Railbelt can best meet the goal of producing half of its
electrical energy from renewable resources by 2025.
☼The declining availability of inexpensive natural gas that has
been historically used to generate electrical power, especially in
the south-central region.
☼The limited ability of Alaska’s existing small utilities to invest
in large scale projects due to the capital requirements of these
projects compared to the size and financial capabilities of
existing utilities, and whether a transition plan from a
decentralized model to a unified Generation and Transmission
(G&T) organization would resolve this issue.
In order to address these issues, a model was developed to evaluate
the addition of new generation capacity for the Alaska Railbelt energy
system. This model was then used to evaluate issues including:
☼The role that conservation by end users (demand side
management) can play in meeting future needs by reducing the
overall demand.
☼The integration of a large scale hydropower project, such as the
Susitna Dam, onto the Railbelt grid to meet future electric power
needs.
☼The addition of other renewable resources such as geothermal,
wind, and use of municipal solid waste.
☼The effect that a possible tax on carbon emissions might have on
the economics of each of the alternatives.
☼The possible financial strategies that might be used for large
scale energy projects.
☼The fragility of the transmission network that connects the
communities along the Alaska Railbelt, and the costs of upgrades
to this system to make it more robust.
33
Regional Energy Planning
Table 2. Summary of Economic Results of Four Basic Scenarios.
Table 2 summarizes the economic results of the Railbelt IRP
study, based on 4 scenarios:
☼Scenario 1A – Base Caseload Forecast – Least-Cost
Plan
☼Scenario 1B – Base Caseload Forecast – Force 50%
Renewables
☼Scenario 2A – Large Growth Load Forecast – Least-
Cost Plan
☼Scenario 2B – Large Growth Load Forecast – Force
50% Renewables
All scenarios include the cost of CO2 Cap and Trade programs.
The predicted charges are based on the EIA and EPA version
of the Cap and Trade bill that passed the U.S. House of
Representatives.
Summary of Results from the Railbelt IRP
The Railbelt IRP was first released to the public in
November 2009, and included estimates of the cost
of electricity under the various scenarios modeled,
indicating that the wholesale cost of power under
these scenarios would vary between 17 and 20¢ per
kW-hr. This cost is consistent with the large capital
requirements of a large hydro project (between $4.1
and $10 billion dollars), but are above the current
average cost of power in Alaska, given by the U.S.
EIA at 13.88¢ per kW-hr (retail).
34
.
Long Lake, Snettisham Hydroelectric Project.
35
Financing Gap
Figure 1-9, from the Railbelt IRP, helps put into context the scope of the Railbelt
capital investments relative to the estimated combined-debt capacity of the Railbelt
utilities. The curves at the bottom of the graph represent Seattle Northwest’s
estimate of the bracketed range of additional debt capacity collectively for the
Railbelt utilities, adjusted for inflation over time. The upper curve shows the Capital
Expenditures required for the projects listed in the Railbelt IRP. The difference
between the top and two lower curves is the financial gap that represents the capital
deficiency.
Financing Alaskan Energy Projects
There are several ways to close the financial gap:
1) Reduce the capital expenditures by
reducing the number and size of projects.
2) Increase the debt capacity by building a healthy
economic base, obtaining favorable financing terms
such as loan guarantees, low interest rates or
grant assistance.
3) Obtain grant funding from state, federal,
or other outside sources.
Reducing Capital Expenditures
The key to reducing capital expenditures is to develop
criteria for project selection, to identify, evaluate and
compare each project for the desired results. Project
estimates can be refined for minor cost reductions, but
in the end, construction of all projects may still not be
affordable. There are governmental loan enhancement
programs such as loan guarantees, discounted interest
rates, tax credits or tax exempt financing options that can
reduce the resulting project cost.
Increasing Debt Capacity
The most direct method of increasing debt capacity is
through association or partnering with an entity that
possesses a high credit rating. The arrangement could
be through direct participation in a project or through an
agreement to guarantee project bonds or commit to pay for
future funds, such as a take-or-pay contract.
Enhancing the economic base can provide additional funds
to pay for infrastructure while increasing the debt capacity.
Increasing debt capacity through economic development is
expected to take several years and will require a concerted
focused vision and effort. Several simple but effective
Figure 1. (from page 3) From the Railbelt Integrated Resource
Plan.
36
projected average, the community will be required to continue to make
loan payments, and not benefit from crude oil price reductions. It is
important to critically analyze the current trends and the projected
cost of crude oil before converting to a stable-priced renewable energy
resource loan program.
Financing - A Path Forward
In order to carry out the goals outlined in this plan, a substantial
investment in construction of new energy infrastructure will be
required. A final financing plan for projects will be developed to
include a combination of traditional funding options such as bonding,
commercial loans, grants, and governmental loan guarantees. In
addition, less traditional methods should be considered that may
ultimately provide a better fit for the current needs of Alaskans, such as
leveraging the financing resources of the State of Alaska in conjunction
with existing statutory or governmental programs.
Performance Contracting of Energy Efficiency and Conservation
Projects
Energy efficiency and conservation programs are expected to take
advantage of a combination of performance contracting and grant
programs similar to the existing Alaska Housing Finance Corporation,
Home Weatherization Program. Performance contracting is a method
of achieving energy efficiency savings when initial capital dollars are
limited or not available. Typically, a performance contractor will assess
a commercial or public building to determine the potential energy
savings opportunities and offer a retrofit package to the owner. The
package includes negotiating a loan to cover the capital costs for the
efficiency improvements, with monthly payments equal to or less than
the amount saved through reduced energy bills or other cost savings.
There are several companies that specialize in performance contracting
that will guarantee the actual savings in order to ensure the performance
contract program provides a cost reduction to the owner.
Financing Alaskan Energy Projects
strategies are discussed in the Economic Development section on page
23 of this document that could be used to increase debt capacity through
increasing the economic base in Alaska. A robust economic base will
support an increased debt capacity that can weather national and global
economic variations.
Existing Debt Capacity
Debt capacities are a function of the borrower’s ability to repay the
loans and are directly linked to the local ability to raise cash, either
through an economic base or assistance. One way to quantify debt
capacity in a community is to look at the funds that are currently being
spent for energy. There are three major components to consider when
looking at energy costs; fuel, operations and maintenance, and existing
debt payments. Existing debt payments are assumed to continue through
the life of the asset, so they are considered sunk cost. Operations and
Maintenance (O&M) costs of existing systems are expected to be
similar to the O&M costs of an alternative system. The remaining cost
of fuel provides an approximation of the annual payment towards a loan
at the debt capacity limit that would be available for the construction of
a renewable energy project.
The community detailed reports use the reduction in diesel fuel costs
less the increased annual debt payments to determine the savings. If the
fuel reduction savings is equal to the annual payments for additional
loan, the energy will cost the same and the savings will be zero. The fuel
costs in the model have been determined for each community, based
on a 20-year average price of crude oil of $107.50 per barrel. A zero
savings indicates that the cost of a renewable energy project is the same
as continuing to purchase fuel at an equivalent crude oil price. The loan
will provide a stable energy cost to the community through level yearly
loan payments. As crude oil prices increase above the equivalent crude
oil price, the community will realize increased savings over continued
use of diesel fuel. Conversely, if the crude oil costs remain below the
37
As with all debt instruments, cash flow is important to ensure
lender confidence, reduce the risk of default, and maintain reduced
interest rates on loans. The cash flow that is currently expended on
the immediate cost of fuel could instead be used to pay for a capital
construction loan and any associated increase in operating costs. In a
simple example, a small community that is currently paying $100,000
a year for diesel fuel could have equivalent renewable energy project
loan payments for a $1,000,000 loan at 6% over 20 years. Assuming
the construction of a renewable energy project with no fuel cost or a
constant fuel cost, this trade of fuel cost for debt will stabilize the cost
of energy for the life of the project.
Financing Alaskan Energy Projects
Grant Funding
Grant funding, such as through the existing Alaska Renewable
Energy Fund, is one method of funding the capital costs of energy
projects, but they are rarely a sustainable funding source in the long-
term. When grant-funded projects reach the end of their useful life,
another grant will be required to rebuild the system and maintain the
same resulting energy costs. Including investment in a Repair and
Replacement (R&R) fund as a portion of customer billing rates would
allow the development of a sinking fund to finance the replacement
plant at the end of its useful life. Electric utilities in Alaska are issued
a Certificate of Public Convenience and Necessity (CPCN) after the
utility is found to be fit, willing, and able to provide the service. The
CPCN also obligates the utility to provide that service to the public.
The R&R fund would be collected by the electric utility to pay for the
energy system replacement and ensure the utility is obligated to invest
in the new plant to provide ongoing service. Only utilities, which have
been issued a CPCN should be allowed to collect an R&R fund to
provide sustainability of grant funds. All other entities without a CPCN
should be limited to participating in a revolving loan fund to finance
construction, rather than being eligible for state-funded grant programs.
A major advantage of revolving loan programs is that upon repayment
of the loan, the principal is available to be reissued for other projects.
Loans
Financing for projects can be based on traditional market financing
options such as bonding, but may not be possible due to the broad nature
of the projects and the open nature of the locally controlled business
model that is important to Alaskans. Less traditional methods would
include the financing resources of the State of Alaska in conjunction
with existing statutory programs which may provide a better fit for
Alaskans. Rather than relying on grant funding for energy projects,
the available funds could be used to secure financing through the use
of loans from the Power Project Fund (PPF) established under AS
42.45.10.
38
Assuming a constant fuel demand, we are on track
to spend over $5 billion (est.) on diesel fuel alone
in rural Alaska, and an additional $60 billion (est.)
on fossil fuels in the Railbelt over 20 years.
Financing Alaskan Energy Projects
On page 39, Figure 5 forecasts crude oil prices per barrel in 2009
dollars for the next 20 years. This graph is based on projections by the
U.S. Department of Energy, EIA, with original data published in 2007
dollars. For our analysis, we used the 20-year average (2010–2030) of
the 2009 EIA projection, or $107.50 per barrel.
The graph also demonstrates the interrelationship of crude price per
barrel and fixed loan payments that could result. If the community in
the prior example purchased the $100,000 of fuel oil at $100.06 per
barrel, the line labeled “Fixed Cost of Loans” would indicate the break-
even point for the renewable energy project. As the price of crude oil
continues to increase, the fixed loan payment would equate to an energy
cost savings.
Debt reduction grants will reduce payments and the effective cost of
energy as can be seen on the line labeled, “Fixed Cost of Debt after
Debt Reimbursement.”
All appropriations for debt reduction loans would be specified by the
Alaska State Legislature for specific projects. This flexible schedule
will allow for energy projects to be constructed at an earlier date, with
the grant funds to be appropriated when the cost of crude oil is higher.
It should be understood that stabilizing energy costs through fixed loan
payments may cost more if the cost of fuel were to drop below the loan
payment level. For this reason, it is imperative that a thorough analysis
of fuel pricing be conducted. Funds to capitalize a revolving loan fund
could be generated through the issuance of bonds or appropriated
general funds. Federal loan guarantees could be effectively used to
increase availability of commercial loans and decrease the effective
interest rate. Construction of infrastructure for the municipalities, not-
for-profit utilities, and non-profits could have tax implications on the
organizations.
Each organization should identify the proper tax treatment for
infrastructure grants. Additional financial benefits can be obtained
through the use of Production Tax Credits, accelerated depreciation
schedules, Clean Renewable Energy Bonds (CREBs), sale of Green
Tags or carbon offsets, and other federal and state renewable incentive
programs.
39
Financing Alaskan Energy Projects
$40.07$50.66$64.10$74.61$83.75$91.64$100.06$105.40$109.83$114.30$116.63$118.40$119.75$120.45$121.72$122.31$120.01$121.48$123.23$125.36$126.08$128.60$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
$110.00
$120.00
$130.00
$140.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Crude Oil Prices EIA
Fixed Cost of Loans
Fixed cost of debt after debt reimbursement
Energy Information Administration 2008 Medium Crude Oil Price Projection
Price in 2009$ inflated from 2007$ by 3.408% factor
2010-2030 Average $107.54/ barrel
Figure 5. Energy Information Administration’s 2008 Medium
Crude Oil Price Projection.
40
Appendix 1: Community Deployment Summary
Renewable energy deployment scenarios are a community energy
planning format that consists of a breakdown of percentages of
plausible energy sources for a given community. Typically, beginning
with 100% diesel for both space heating and electricity, the plan
presents an option for immediate, short, medium, and long terms, while
ending with a stretch-goal scenario. Presented in this appendix are the
deployment scenarios of the 227 non-Railbelt communities in Alaska,
grouped by regional Native corporation boundaries.
After screening out a number of different energy sources as being
technically or economically unproven on a rural or village scale, AEA
program managers identified community resources that are mature
technologies and economically viable. Alaska communities were
grouped by combinations of four available resources – wind, wood,
hydro, and geothermal – resulting in 10 different “summary templates”
(with each community assigned to 1 of the 10 categories). The generic
deployment scenarios were created for each of the 10 summary
templates. A narrative explaining the choices of percentages was
developed for each of the generic deployment scenarios. These generic
deployment scenarios are included in Appendix 4.
The community deployment scenario database was first uploaded with
the generic summary templates, with most of the 227 non-Railbelt
communities assigned to 1 of 10 templates. Communities using existing
hydro and wind generation capacity (either locally or via an intertie)
had their “current” energy source percentages adjusted accordingly.
Also added in were estimated current energy cost information for both
electricity and heat. The cost of energy calculations shown on the
deployment summary are rough estimates, and are described in more
detail for each community in Appendix 3.
It must be emphasized that the energy deployment scenario for each
community is not a definite plan set forth by AEA, but a general
Explanation of Appendices
proposed pathway based on the best information available to AEA’s
program managers. The intent is to stimulate discussion on community
energy planning and provide rough cost estimates of community-scale
projects. Individual communities must decide for themselves what
their energy development strategy should be and how best to use local
renewable energy resources.
Appendix 2: Expanded Community-by-Community Assessment
This appendix expands on the summary provided in Appendix 1,
and includes more complete information on current energy usage,
resources, and deployment strategies for each community outside the
Railbelt.
Appendix 3: Community and Regional Capital Cost Summaries
This appendix includes the community and regional cost roll-ups.
Appendix 4: Generic Deployment Scenarios
Alaska communities were grouped by combinations of 4 chosen
available resources – wind, wood, hydro, and geothermal – resulting in
10 different summary templates (with each community assigned to 1
of the 10 categories). The goal of each of the 10 scenarios is to lay out
a possible pathway for the deployment of mature, reliable technologies
to reduce the amount of diesel consumed. These renewable energy
sources will be deployed in a phased approach over a realistic period of
time. The long-range stretch goal is envisioned to be a future scenario,
when up to 100% of electrical and thermal energy consumed in the
community is produced from local, renewable sources.
The generic deployment scenarios were a starting point for each
community deployment. The results of each community deployment
were reviewed and adjusted based on community size, resource
availability, community energy requirements, etc. The community
deployments were again reviewed to determine if there were large
41
increases in the cost of energy resulting from a deployment. For
example, a small hydroelectric facility that had limited water resources
would require a large capital expenditure, and would result in a
large increase in the cost of energy for the community. Projects that
had significant increases in the cost of energy were removed from
the deployment scenario. Removing high-cost projects from the
deployment will result in the use of diesel energy for the local load and
a reduction in the percent of energy from renewable sources.
It is worth noting that almost none of the deployment scenarios of
the 227 non-Railbelt communities conform exactly to any of the
10 summary template scenarios shown in this appendix. For an
individual community, the timeline for deployment will be a function
of several factors: cost of diesel fuel, cost of alternatives to diesel,
funding resources, local enthusiasm, and applied research for presently
unproven technology applications.
Appendix 5: Resource Maps
Appendix 6: Energy Savers Tips for Rural Alaska
In this appendix is a publication titled, “Energy Savers Tips for
Rural Alaska” which was developed by Southwest Alaska Municipal
Conference (SWAMC) and AEA. The publication provides helpful
hints that can be deployed to reduce the energy consumption in your
home.
Appendix 7: Transmission
This appendix expands the discussion on transmission and provides
cost information that explains why, from a purely economic
perspective, building additional transmission infrastructure will not
help meet the objectives laid out in this plan.
Explanation of Appendices
Appendix 8: Research Needs Assessment
This appendix summarizes what the current state of knowledge is on a
number of emerging technologies, and options to improve our existing
energy infrastructure. This includes hydrokinetics, short-rotation
woody biomass crops, biomass CHP systems, and energy storage. It
also includes a discussion of priorities and suggestions for research
funding.
Appendix 9: Study of Storage Options and Costs
Energy storage has been included in the Community-by-Community
Assessment as critical to meeting the long-term and stretch-goal
objectives for many communities. This is because some of the
renewable energy resources, such as wind, are intermittent and not
necessarily available on demand. Today, many advanced energy
storage options such as batteries, flywheels, and super-capacitors are
still in development. Lower tech options, such as thermal storage,
are commercial but can be expensive when deployed on a large scale
to meet medium and long-term needs for storage. This appendix
outlines the available and expected future options for energy storage
appropriate for Alaska, and costs estimates for deploying selected
technologies at several different scales typical of rural communities.
The cost estimates were prepared using recent (2009) quotes from
energy storage technology vendors. It is hoped that the energy storage
technology sector will advance significantly in the next decade in terms
of improved efficiency and reliability of equipment and reduced costs.
Appendix 10: Propane Study
This appendix evaluates the concept of delivering North Slope propane
to rural Alaska as a mid-term bridging fuel. Cost estimates were
prepared for capital and operating costs to provide propane from the
North Slope to rural Alaska. Due to the 10-year term of the capital debt,
the propane alternative would provide energy to rural Alaska at about
twice the cost of continuing the use of diesel fuel.
42
Explanation of Appendices
Appendix 11: Methodology Used in the Example Community-by-
Community Plan
This appendix provides details on the methodology and assumptions
used in generating the Community-by-Community database.
Appendix 12: Railbelt Integrated Resource Plan Report
43
2010 Alaska Energy Pathway DVD
2010 Alaska Energy Pathway
Appendix 1 Community Deployment Summary
2 Expanded Community-by-Community Assessment
3 Community and Regional Capital Cost Summaries
4 Generic Deployment Scenarios
5 Resource Maps
6 Energy Savers Tips for Rural Alaska
7 Transmission
8 Research Needs Assessment
9 Study of Storage Options and Costs
10 Propane Study
11 Methodology Used in the Example Community-by-
Community Plan
12 Railbelt Integrated Resource Plan Report
Resource Energy Plans:
Ahtna Chugach
Aleut Doyon - TCC
Bering Straits Koniag
Bristol Bay NANA
Calista Sealaska
2009 Alaska Energy Plan: A First Step Toward Energy
Independence.
Community Information by Regional Corporation
During the Alaska Rural Energy Conference held
April 27-29, 2010, AEA rolled out the draft Alaska
Energy Pathway. Included in this DVD are two videos
from that conference which explain the Pathway in
more detail:
Alaska Energy Pathway DVD
☼Steve Haagenson – AEA Executive Director
☼Gene Therriault – Senior In-State Energy
Policy Advisor
44
Acknowledgements
STATE OF ALASKA
Governor’s Office:
Gene Therriault - Senior Policy Advisor on In-State
Energy; Joe Balash - Special Assistant
Alaska Energy Authority:
Steve Haagenson; Mike Harper; Bruce
Tiedeman; Jim Strandberg; Karsten Rodvik; Monica
Moore; Peter Crimp; Lenny Landis; Doug Ott;
Ron Brown; James Jensen; Sean Skaling; Richard
Stromberg; Neil McMahon; Devany Plentovich; JC
Barger; Bryan Carey; Chris Mello; Kris Noonan;
Linda MacMillan; Emily Binnian; Jeff Williams;
Khaled Zayed; Alan Fetters; William Sampson;
Shauna Howell; Bruce Chertkow; Leona Hakala
State Legislature:
House Energy Committee; Senate Energy
Committee; House Energy Advisory Committee
Participants: Rep. Bryce Edgmon; Rep. Charisse
Millett; Rep. Reggie Joule, Rep. Bill Thomas; Rep.
Jay Ramras; Senator Al Kookesh; Senator Lyman
Hoffman; Senator Don Olson; Senator Lesil McGuire;
Senator Bill Wielechowski; Senator John Coghill;
Legislative Aides (Jeff Turner; Larry Persily; Shelly
Morgan; Trevor Fulton; Jeff Stepp; Joe Holbert; Adam
Berg)
Others:
University of Alaska: Alaska Center of
Energy & Power (Gwen Holdmann; Jill Maynard;
Amanda Byrd; Markus Mager; Dennis Witmer; Jason
Meyer; Rebecca Warren); Institute for Social &
Economic Research (Scott Goldsmith); Arctic Energy
Office; Alaska Department of Natural Resources:
Division of Forestry (Al Edgren), Division of
Geological & Geophysical Surveys (James Clough),
Division of Support Services (Teri Moody); Ron
Miller; Cold Climate Housing Research (John Davies,
Jack Hebert)
REGIONS
Ahtna: Kenny Johns; Nick Jackson; Michelle
Anderson; Martin Finnesand; Robert Wilkinson;
Donna Galbreath; Nora David; Roy Ewan; Terri
Nutter; Wilson Justin; Paul Tony; George Drinkwater
Aleut: Dimitri Philemonoff; Ken Selby; Bruce
Wright; Karen Pletnikoff; Thomas Mack; Larry
Cotter; Everette Anderson; Nick Goodman; Stanley
Mack
Arctic Slope: Ben Franz
Bering Straits: Loretta Bullard; Denise Michels;
Josie Bahnke; Walter Rose; John Handelman;
Anahma Saito; Jerald Brown; Robert Hafner; Joel
Alowa; Leroy Seppilu
Bristol Bay: Ralph Anderson; Robin Samuelsen;
Jason Metrokin; Joe Chythlook; Melody Edgmon;
Robert Clark; Debby Tennyson; Nels Anderson, Jr.;
Russell Nelson; Hjalmar Olson; Donna Vukovich
Calista: AVCPHA (Bob Charles; Ron Hoffman);
AVCP (Myron Naneng); Ivan Ivan; George Lamont;
George Guy; Carl Maxie; William Igkurak; Willie
Kasayulie; Tom Jacobs; Elaine Brown; Robert Nick;
Deborah Vo; Mary Nelson
Chugach (Prince William Sound): CREW (Bruce
Cain; Clay Koplin; Tim Joyce); Valdez (Bert Cottle);
Chugachmuit (Elmer Moonin; Charlie Sink); Olin
Harris; Patrick Norman; Chenega (Mike Virgil;
Chuck Totemoff)
Cook Inlet: Margie Brown; Tom Harris; Kenai
Borough
Doyon (TCC): TCC (Ross Coen; Jerry Isaacs; Will
Putnam); Bear Ketzler; Pat Sweetsir; AP&T (Eric
Hannan); Ben Stevens; Chris Sommers
Koniag: William Anderson; Kodiak Archipelago
Rural Forum (Alisha Drabek; Robbie Vennel; Duane
Dvorak; Marty Shuravloff); Tom Quik; Bill Nelson
NANA: Ingemar Mathiasson; Bobby Schaeffer; Brad
Reeves; Craig McConnell; Dean Westlake; Al Adams,
Jr.
Sealaska: Southeast Conference (Robert Venables),
SEAPA (Dave Carlson), IPEC; (Jodi Mitchell),
AP&T (Bob Grimm & Greg Mickleson), Sealaska
(Katherine Eldemar); Kake (Henrich Kadake); T&H
(Percy Frisby; Bob Loesher); Richard George; City &
Borough of Wrangell
PUBLIC SECTOR
Brian Grey (AE&E); Chris Rose (REAP);
William Brister; John Haase; Clarissa Quinlan;
Allen Rocker; & Michael Witham (Marsh Creek);
Warren Taylor; Ryan Towry; & Fraser Kiddle (EPS);
Mike Brubaker (ANTHC); Lake & Penn Borough;
City & Borough of Fairbanks; many urban/rural
utilities; HMS Estimations; Alaska Power Association
(Marilyn Leeland); Denali Commission (Bob
Pawlowski; Denali Daniels); Bill Popp (AEDC);
Meera Kohler (AVEC); Jason Brune (RCA); Caitlin
Higgins (ACA); Stacy Schubert, Woody Wenstrom
(Fairbanks); Fred Reeder (Sitka)
***Special Thanks: W.H. Pacific (Jay Hermanson;
Gilbert Johnson; Brian Yanity); William Sampson, for
their persistence and focus in the development of the
community deployment and expanded community-by-
community assessment.
There are many other individuals not listed here who
have helped in the creation of this document, we
would like to thank everyone who has been involved
in reviewing and providing input to this Alaska
Energy Pathway.
Photo Credits:
Inside front cover: Photo courtesy of Denali Commission; Page
2: Photo courtesy of Alaska Energy Authority; Page 4: Photo
courtesy of Alaska Energy Authority; Page 10: Photo courtesy of
STG Incorporated; Page 12: Left: Photo by Anna Hilbruner, Right:
Courtesy of Steve Haagenson/AEA; Page 15: Photo courtesy
of Gwen Holdmann/ACEP Page 16: Photo courtesy of Gwen
Holdmann/ACEP; Page 19: courtesy of Amanda Byrd/ACEP;
Page 21: Photo coutesy of Lenny Landis/AEA; Page 22: Photo
courtesy ofAlaska Building Science Network/Geoff Butler; Page
34: Photo courtesy of AEA.
45
Alaska Energy Pathway DVD
How To Use The DVD:
Start-up
• Insert DVD into computer disc player.
• Open DVD Home Page
• Method One: Wait up to 30 seconds for DVD to auto start.
• Method Two: If DVD does not auto start, browse the DVD contents
using Windows Explorer or the Macintosh equivalent. Open the 2010
Alaska Energy Pathway file.
Internet browser compatibility
• The Alaska Energy Pathway is best viewed in Google Chrome or
Mozilla Firefox
• Internet Explorer - Please open "Viewing Options" link from DVD
Home Page.
The DVD Start-up Home Page
The links on the left-hand side of the screen have pop-up menus, which
allow the user to drill down to a specific community, region or report
section.
On the right-hand side of the screen, you will see the 2010 Alaska Energy
Pathway Narrative and its appendices. Scroll your curser over the title of
the appendix, you will see a visual cue to aid you in determining which
item you’d like to review first.
Troubles
Please refer to the Having Trouble Viewing Contents section for more
assistance in viewing the documents in one of the following views:
• View Basic Version
• View DVD Contents
• Browse Viewing Options
Contact
Please contact the Alaska Energy Authority at (907) 771-3000 with any
questions. Thank you.
Alaska Energy Authority
813 West Northern Lights Blvd. Anchorage, Alaska 99503
Phone (907) 771-3000
Toll Free in Alaska (888) 300-8534
Fax (907) 771-3044
www.akenergyauthority.org