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HomeMy WebLinkAboutSUS409Comment Drilft Railbelt Electric Power Alternatives Study: Evaluation of Railbelt Ekctric Energy Plans February 1982 For'the Office of the Gowernor State of Alaska Diwtlion of Polk,Dewelopment and Planning and the Gowemor's Policy Rewiew Committee lInder Contract 2311204417 o Battelle Pacific Nonhwest laboratories CQMIo'[,-;T DRAFT RAILBELT ELECTRIC POWER ALTERNATIVES STUDY: EVALUATION OF RAILBELT ELECTRIC ENERGY PLANS J. J.Jacobsen D.L.Brenchley J.C.King M.J.Scott T.J.Secrest F.H.Boness (Consultant) J.E.Haggard (Consultant) February 1982 Prepared for The Office of the Governor State of Alaska Division of Policy Development and Planning and the Governor's Policy Review Committee under Contract 2311204417 BAnELLE Paci fi c Northwest Labo.oatori es Richlanj,Washington 99352 EXECUTIVE SUMMARY Battelle,Pacific Northwest Laboratories conducted the Railbelt Electric Power Alternatives Study developed and analyze several alternative plans for electric energy development in the Railbelt region. To develop these results,specific analyses were conducted: •Future fossil fuel price and availability were estimated. •Electrical energy demand was forecasted. •Generation and conservation options available to meet demand were evaluated and selected. •Alternative electric energy plans were developed to meet forecasted demand using the generation and conservation options. •The costs of power were estimated and the socioeconomic and environmental effects of each electric energy plan were presented. •The constraints and opportunities available for the state to implement the plans were assessed. Fuel oil,natural gas,coal,and refuse-derived fuel are expected to be available for electrical generation in the Railbelt over the time horizon of the study.Over the long term,fossil fuel prices are expected LO escalate at a rate of about 2%per year above the rate of inflation.Sensitivity tests were run to assess the effects of a lower escalation rate of 1%per year and a high escalation rate of 3%per year.The following include key findings and assumptions regarding fossil fuel availability and price: •Natural gas prices in the Cook .Inlet area are expected to increase more rapidly than 2%per year during the 1985-1995 time period as existing contracts expire. •Current reserves of natural gas in the Cook Inlet area are not expected to be adequate for expanded generation beyond 1990-1995. •Natural gas from the North Slope is assumed to be available in the Fairbanks area by 1988. iii •Large-scale coal production for the export market is assumed to make coal available for electrical generation in the Anchorage area by 1988. Forecasts of annual electrical energy and peak demand were made for the Railbelt area.Electricity demand was forecasted assuming several economic development scenarios.These scenarios are characterized by combinations of assumptions regarding private economic activity and State of Alaska fiscal policy. Three basic scenarios for private economic activity and state spending were combined to give three overall economic scenarios.These three economic scenario~combine high private economic activity and high state spending (high economic growth case),medium private economic activity and mediu state spending (medium economic growth case)and low private economic growth and low state spending (low economic growth case).Economic growth cases involving increased industrialization and unsustainable state spending were also investigated. Peak demand and annual energy forec~sts for the low,medium,and high economic growth cases are presented below.These forecasts assume the continued development of conventional generating alternatives (electric energy Plan 1A as discussed below).The level of demand was found not to be greatly influenced by different energy supply plans. Low Economi c Medium Economic High Economic Growth Growth Growth Peak Energy Peak Energy Peak Energy Year 1!:00.(Gwh)1!:00.(Gwh).lli!!l.(Gwh) 1980 520 2550 520 2550 520 2550 1985 620 3030 640 3140 670 3240 1990 800 3850 880 4260 1060 5414 1995 840 4060 990 4880 1180 6060 2000 820 3990 1020 5030 1230 6380 2005 870 4280 1090 5420 1440 7430 2010 1000 4940 1260 6260 1760 9010 A wide variety of energy resources that can be used for generating electricity are found in the Railbelt.Resources currently being used include iv coal,natural gas,petroleum-derived liquids and hydropower.Energy resources chat are not currently being used but that could be developed include peat, wind power,solar ene~gy,municipal refuse-derived fuels and wood waste.In this study,a broad ~2t of generation technologies and combinations of fuel conversion-generation technologies was identified.These technologies were evaluated based upon several technical,economic,environmental and institutional considerations.Based upon this evaluation,a final set of technologies was selected for further analysis.Data required to support the analysis of the electric energy plans were developed for each technology. In addition to the generating alternatives,four specific conservation or electric energy substitutes were selected for further analysis and inclusion into the electric energy pans.These subsitutes are passive solar space heating,active solar hot water heating,wood stoves and bUilding energy conservation. Four electric energy plans were developed using ~ifferent combinations of these generation and conservation options.Each plan represents a possible electric energy future for the Railbelt.The plans were selected to encompass the full range of viable alternatives available to the Railbelt. Plan 1: Plan 2: Plan 3: Plan ~.: Base Case A.Without Upper Susitna B.With Upper Susitna High Conservation and Use of Renewable Resources.. A.Without Upper Susitna B.With Upper Susitna Increased Use of Coal Increased Use of Natural Gas This report uses levelized cost of power to compare power costs among the various electric energy plans.The.levelized cost of power is the annual equivalent of the present value of the costs of power.The levelized costs of power (mills/kWh)for these electric energy plans for the low,medium,and high economic scenario are presented below.The levelized cost of power are presented for both the time horizon of this study (1981-2010)and a longer time period that includes the approximate economic life of the Upper Susitna project (1981-2050). v Leve 1ized Cost of Power (Mills/kWh) Low Medium High Economic Economic Economic Scenario Scenario Scenario 1981-1981-1981-1981-1981- 1981- 2010 2050 2010 2050 2010 2050 Plan 1A 58 65 58 64 60 66 Plan 1B 58 63 58 59 58 60 Plan 2A 58 66 59 66 58 66 Plan 28 57 61 58 61 57 69 Plan 3 58 67 59 65 62 68 Phn 4 .57 64 59 66 61 68 For the medium economic scenario,essentially no difference exists in the levelized cost of power among the various electric energy plans over the 1981- 2010 time period.Over the longer time horizon the costs of power for the plans including the Upper Susitna project (Plans 1B and 2B)are lower than for the other plens. For the low economic scenario,ag~in little difference exists in the levelized costs of power over the 1981-2010 time horizon.The advantages of the plans including the Upper Susitna project are smaller than for the medium economic scenario. In the case of the high economic scenario,relatively little difference exists in the costs of power over the shorter time period,although the plans including the Upper Susitna project have slightly lower power costs.Over the longer time period,the plans including the Upper Susitna project have significantly lower power costs.The plans heavily reliant on fossil fuels, Plans lA,3,and 4,have relatively high power costs in the high economic scenario.In general,the longer the time period and the higher the demand, the more attractive are plans containing the Upper Susitna project. Based upon the evaluation of the socioeconomic and environmental effects of the plans and sensitivity analyses of factors affecting the plans,the following conclusions are drawn for the various electric energy plans. Plan 1A:Base Case Without Upper Susitna •The levelized costs of power for this plan are relatively stable among the various sensitivity tests.Generally,it is neither the highest nor the lowest cost plan. vi •Significant potential impacts on air quality.land use,and suscepti- bility to inflation due to fossil fuel use are possible. • Incremental coal mining and reclamation activities will occur due to expanded coal use in the Beluga and Healy areas. •The development of a coal export mine at Beluga to supply coal to genera~ing plants located there is uncertain. •The costs and environmental impacts of the Chakachamna hydroelectric are uncertain. Plan IB:Base Case With Upper Susitna •Except for cases assuming higher than estimated capital costs for the Upper Susitna project,this plan provides relatively low po~er costs over the 1961-2010 time period.The plan provides either the lowest or nearly the lowest cost of power in all sensitivity tests over the extended time period. •Electric power needs can be met without significant impacts to air quality,visibility,health and safety and other environmental sectors.However,improper river flow control may be detrimental to fish production. •Relatively good information is available on capital cost and environmental impacts of the Upper Susitna Project. •The plan is resistant to inflation once the project is constructed. o Significant boom/bust,land-use effects and high Capital costs are associated with the construction of the Upper Susitna project. Plan 2A:High Conservation and Use of Renewable Resources Without Upper Susitna .•This plan has slightly higher power costs in most cases.The costs are high mainly because of the plan's reliance on relatively high capital cost generating alternatives (hydroelectric,refuse-derived fuel,and wind). •Reduced air infiltration associated with building conservation may present health and safety hazards from indoor air pollution.The exact relationship between bUilding conservation and indoor air pollution has not been established. vii •The capital costs of alternate hydroelectric projects are uncertain. •This plan assumes that a state conservation grant program exits. Plan 2B:High Conservation and Use of Renewable Resources with Upper Susitna •This plan has much the same costs and impacts as Plan lB.This similarity is expected since they both include the Upper Susitna project. •The health and safety aspects of the indoor air quality of conservation activities are unknown. •As with 2A,this plan assumes an extensive state conservation grant program. Plan 3:Increased Use of Coal •This plan produces relatively high costs of power over the 1981-2050 time period.The plan is more a~tractive in the case with lower fuel price escalation rates. •Significant potential problems are possible in air quality,water quality,visual impacts,and land-use and inflation effects. •Constraints due to nondegradation air-quality regulations are possible. •Incremental coal mlnlng and reclamation activities will'occur due to expanded coal use in the Beluga and Healy area. • .The development of a coal export mine at Beluga is uncertain. Plan 4:Increased Use of Natural Gas •This plan behaves very similarly to Plan 3.It provides the lowest cost of power over the 1981-2010 time period in the case of lower fuel price escalation rates and in the case of reduced demand beyond 1995.It is one of the higher cost alternatives over the extended time horizon. •This plan has little impact on all sectors of the environment.No major problems are associated with jobs,boom!bust effects,or land use. viii • •Ou~to high technology of fuel cells and gas combined-cycle units, substantial spending wi,l occur outside the state. •Inflation.effects are significant becaus~power production is directly tied to the price of natural gas. •EXisting reserves of natural gas in the Cook Inlet area will not be adequate to support expanded gas-fired generation beyond 1990-1995. The discovery of additional reserves is uncertain. As indicated by this discussion,much uncertainty remains regarding all key alternatives to the Upper Susitna project.Coal,natural gas and hydroelectric projects are the primary alternatives to the Upper Susitna project.Whereas uncertainties do remain regarding the Upper Susitna project, more is known about the costs and impacts of the Upper Susitna project than any of the alternatives.The following uncertainties are associated with the alternatives: •Coal-based generation at Beluga depends upon the development of a large-scale export mine.Such a mine is based upon Pacific Rim steam coal market development.While this market is expanding development of Beluga coal resources is uncertain. •Current reserves of natural gas in the Cook Inlet area are not expected :0 be adequate for generation beyond 1990-1995.The availability of additional reserves by that time is uncertain. •Gas-based generation in Fairbanks depends upon the availability of natural gas from the North Slope in the Fairbanks area either via the Alaska Natural Gas Transportation System (ANGTS)or another system. •The capital costs and environmental impacts of alternative hydroelectric projects are based upon reconnaissance studies and as a result have a high degree of uncertainty associated with them. •The relationship between building conservation and indoor air pollution has not been established. ix CONTENTS EXECUTIVE SUMMARY 1.0 INTROOUCTION 2.0 FUEL PRICE AND AVAILABILITY 2.1 COOK INLET NATURAl.GAS 2.2 COAL 2.3 PEAT 2.4 REFUSE-DERIVED FUEL 2.5 NATURAl.GAS INTERIOR 2.6 NATURAL GAS LIQU IDS/METHANOL 2.7 FUEL OILS • 3.0 ANNUAL PEAK LOAD AND ENERGY REQUIREMENTS FORECASTS 3.1 DEMAND FORECASTING PROCESS 3.2 ECONOMIC SCENARIOS • 3.3 ISER ECONOMIC MODELS 3.4 ECONOMIC AND POPULATION FORECASTS 3.5 DEMAND MODEL 3.6 DEMAND FORECAST 4.0 SELECTION AND ANALYSIS OF ELECTRICAL ENERGY GENERATING ALTERNATIVES 4.1 SELECTION OF GENERATING ALTERNATIVES FOR STUDY 4.2 CONSERVATION ALTERNATIVES SELECTED FOR STUDY 5.0 DESCRIPTION OF ELECTRIC ENERGY PLANS 6.0 DESCRIPTION OF SYSTEMS INTEGRATION TECHNIQUES 6.2 OVER/UNDER-AREEP VERSION MODEL DESCRIPTION 7.0 RESULTS OF SYSEMS INTEGRATION/COMPARATIVE ANALYSIS xi iii 1.1 2.1 2.1 2.4 2.4 2.5 2.5 2.5 2.6 3.1 3.2 3.4 3.7 3.7 3.9 3.12 4.1 4.1 4.14 5.1 6.1 6.2 7.1 7.1 SUMMARY 7.2 PLAN lA:BASE CAS:WITHOUT UPPER SUSITNA 7.3 PLAN IB:BASE CASE WITH UPPER SUSITNA 7.4 PLAN 2A:HIGH CONSERVATION AND USE OF RENEWABLE RESOURCES WITHOUT UPPER SUSITNA 7.5 PLAN 2B:HIGH CONSERVATION AND USE OF RENEWABLE RESOURCES WITH UPPER SUSITNA • 7.6 PLAN 3:INCREASED USE OF COAL 7.7 PLAN 4:INCREASED USE OF NATURAL GAS 7.8 BIBLIOGRAPHY 8.0 SENSITIVITY ANALYSIS 8.1 INTRODUCTION 8.2 UNCERTAINTY IN FOSSIL FUEL PRICE ESCALATION 8.3 UNCERTAINTY IN ELECTRICITY DEMAND FORECASTS 8.4 UNCERTAINTY IN COST AND AVAILABILITY OF MAJOR ALTERNATIVES 8.5 EFFECTS ON ELECTRICITY DEMAND OF STATE SUBSIDIES TO COVER CAPITAL COSTS OF NEW GENERATION FACILITIES 9.0 CONSIDERATIONS FOR IMPLEMEN-'NG ELECTRIC ENERGY PLANS 9.1 FEDERAL CONSTRAINTS . 9.2 A HISTORICAL PERSPECTIVE OF POWER PLANNING IN ALASKA 9.3 THE CURRENT STATUTORY FRAMEWORK IN ALASKA APPENDIX A-DEMAND ASSUMPTIONS AND FORECASTS APPENDIX B -LEVELIZED COST OF POWER xii 7.1 7.10 7.30 7.39 7.52 7.57 7.64 7.72 8.1 B.2 8.3 8.8 8.15 9.1 9.1 9.2 9.7 A.l B.l FIGURES 1.1 Railbelt Area of Alaska Showing Electrical Load Centers 3.1 Electric Power Forecasting Process 3.2 Economic Scenarios 3.3 Railbelt Population 3.4 Railbelt Electricity Demand (RED)Model 3.5 Railbelt Annual Electricity Demand,1980-2010 3.6 Railbelt Annual Peak Demand,1980-2010 6.1 Electrical Demand and Supply Interactions 6.2 AREEP Diagram • 7.1 Peak Electrical Demands for Medium-Medium Economic Scenario • 7.2 Comparison of Annualized Cost of Power for Railbelt Electric Energy Plans· 8.1 Annual Cost of Power ar.d Total Levelized Cost 8.2 Use of Levelized Cost to Select Lowest Life Cycle-Cost Plan xiii 1.3 3.3 3.5 3.8 3.11 3.13 3.15 6.3 6.5 7.2 7.4 8.1 8.3 TABLES 2.1 Fossil Fuel Availability and Price. 4.1 Candidate Electric Energy Generating Technologies for the Railbelt 4.2 Summary of Cost and Performance Characteristics of ~lected Alternatives 5.1 Summary of Electrical Energy Alternatives Included as Future Additions in Electric Energy Plans 7.1 Levelized Costs of Power for Electric Energy Plans (mills/kWh) 7.2 Summary of Potential Environmental &Socioeconomic Impacts of Railbelt Energy Plan 7.3 Existing Capacity (1980)and Capacity Additions and Retirements (1981-2010)-Plan lA (MW) 7.4 Electricity Demand and Generation by Type of Capacity -Plan lA (GWh) 7.5 Integration of Potential Environmental &Socioeconomic Impacts for Plan lA.'. 7.6 Existing Capacity'(1980)and Capacity Additions and Retirements (MW)(1981-2010)-Plan IB 7.7 Electrical Generation by Type of Capacity -Plan IB (GWh) 7.8 Integration of Potential Environmental &Socioeconomic Impacts for Plan IB • 7.9 Existing Capacity (1980)-and Capacity Additions and Retirements (1981-2010)-Plan 2A (MW) 7.10 Electrical Generation by Type of Capacity -Plan 2A (GWh) 7.11 Estimated Number of Homes Using the Conservation Techniques 7.12 Integration of Potential Environmental &Socioeconomic Impacts for Plan 2A • 7.13 Existing Capacity (1980)and Capacity Additions and Retirements (1981-2010)-Plan 2B (MW) xv 2.2 4.2 4.15 15.6 7.5 j I 7.7 7.12 7.13 7.26 7.32 7.33 7.40 7.42 7.43 7.48 7.53 7.55 7.14 Electrical Generation by Type of Capacity -Plan 28 (GWh) 7.15 The Estimated Number of Homes Using the Conservation Techniques in the Year 2010 7.16 Integration of Potential Environmental &Socioeconomic Impacts for Plan 28 . 7.17 Existing Capacity (1980)and Capacity Additions and Retirements (1961-2010)-Plan 3 (MW) 7.18 Electrical Generation by Type of Capacity -Plan 3 (Gwh) 7.19 Integration of Potential Environmental &Socioeconomic Impacts for Plan 3 7.20 Existing Capacity (1980)and Capacity Additions and Retirements (1981-2010)-Plan 4 (MW) 7.21 Electrical Generation by Type of Capacity Plan 4 (GWH) 7.22 Integration of Potential Environmental &Socioeconomic Impacts for Plan 4 8.1 Levelized Costs of Power for Alternate Fuel Price Escalation Rates (mills/kWh) 8.2 Effect of Alternate Fuel Price Escalation Rates on Peak Electricity Demand in 2010 (MW) 8.3 Elasticities of Demund and Load Factors Used in the RED Model 8.4 Peak Demand and Annual Energy in 2010 for the Medium and High Economic Scenarios 8.5 Levelized Costs of Power for Medium and High Economic Growth Scenarios (mills/Kwh) 8.6 Peak Demand and Annual Energy in 2010 for Medium and Low Economic Scenarios 8.7 Levelized Costs of Power for Medium and Low Economic Growth Scenarios (mills/kWh) 8.8 Levelized Costs of Power for Reduction in Electrical Demand After 199O 8.9 Levelized Costs of Power for Increase in Electrical Demand After 199O xvi 7.56 7.54 7.58 7.60 7.61 7.65 7.67 7.68 7.71 8.4 8.6 8.7 8.10 8.10 8.11 8.12 8.14 8.14 8.10 Levelized Costs of Power for Upper Susitna -Capital Costs 20%Lower and Higher Than Estimated (mills/kWh)8.15 8.11 Levelized Costs of Power for Coal Steam Turbine Plan -Capital Costs 20%Lower and Higher than Estimated (mills/kWh)8.16 8.12 Levelized Costs of Power for Penetration of Conservation Alternatives 20%Higher and Lower than Estimated (mills/kWh)8.17 8.13 Assumed Improvements in Heat Rates (Iftu/kWh)•8.18 8.14 Levelized Cost of Power for Lowered heat Rates in Thermal Generation (mills/kWh)8.18 8.15 Levelized Cost of Power for Using Fuel-Cell Combined-Cycle Units Rather than Fuel-Cell Stations -Plan 4 (mills/kWhO 8.19 8.16 Levelized Costs of Power for Increased Capital Cost of Fuel-Cell Stations and Coal-Gasifi~r Combined-Cycle (mills/kWh)8.20 8.17 Levelized Cost of Power for Chakachamna.Capital Costs 20% Lower and Hi9her than Estimated (mills/kWh)8.21 8.18 Levelized Cost of Power Assumin9 Healy Coal is Used in Anchorage Area 8.22 8.19 Levelized Cost of Power Assumin9 Watana Dam Delayed IIntil 1998 8.22 8.20 Levelized Cost of Power and Peak Demand Assuming No Capital Recovery (mills/kWh)8.23 xvii 1.0 INTRODUCTION The Office of the Governor,State of Alaska,Division of Policy Development and Planning and the Governor's Policy Review Committee contracted Wit~,Battelle,Pacific Northwest Laboratories to investigate potential strategies for future electric power development in the Rai1be1t region of Alaska.This report presents the final results of the Rai1be1t Electric Power Alternatives Study. One of Alaska's broad g031s is to assure adequate,long-run supplies of electricity and other energy forms to its citizens and industries at the lowest cost consistent with environmental and socioeconomic concerns.The problem is for dec;,ion makers in Alaska to select a set of electrical generation and conservation options from the many available alternatives and then to pursue implementation. Finding the "best"solution to the problem is not a simple undertaking for several reasons. •The provision of electrical power supply and the extent of conservation directly depends on the supply and price of other energy forms.Power alternatives cannot be analyzed outside the context of this interaction. . •Considerable uncertainty exists about the future requirements for electrical power and other energy forms;however,long lead times are involved in increasing capacity to meet these requirements. •Many pot~ntial generation and conservation alternatives exist.Each has different costs,operating characteristics,availability,and environmental and sociGeco~umic impacts. •The long-run consequences of committing to anyone or a mix of alternatives may profoundly affect the future course of development within the State. •Any long-range planning activity involving major investments inherently involves risks that,given uncertainty about the future, must be considered in the evaluation. •Even if the "best"solution is identified,barriers or at least institutional factors may impede imp1ementa.ion. 1.1 Ultimately,the citizens and elected officials within Alaska must decide which set of electrical generation and conservation options comprise the "best" solution to the problem of assuring adequate electricity supplies in the future.Clearly,the problem not simple;the Railbelt has available several possible plans that could solve the problem with varying degrees of success. The above observations address the problem of electric power planning in its ~roader sense.In a more narrow sense,however,Alaska has committed financial resources of a considerable magnitude to feasibility studies of major hydroelectric projects on the Upper Susitna River.Assuming a finding of feasibility,application(s)for license must be filed and utlimately several- orders-of-magnitude-larger financial resources must be marshalled and committed. Major decisions are required relative to electrical power planning in the near future.The major issue to be addressed in this project is the question of other energy alternatives and their status relative to Susitna hydropower. The Railbelt region,shown in Figure 1.1,contains three electrical load ~enters:the Anchorage-Cook-Inlet area,the Fairbanks-Tanana Valley area,and the Glennallen-Valdez area.These areas are represented by the shaded are~<in the figure.Because of the relatively small electrical requirements of the Glennallen-Valdez load center (~2%of the demand of the Anchorage-Cook In'iet area)it is not specifically analyzed as an individual load center.For this study the Glennallen-Valdez load center is consider~d to be part of the Anchorage-Cook Inlet load center.The electrical demands for the Glenl~allen­ Valdez area are determined as part of this study but are combined with the Anchorage-Cook Inlet loads.Future electrical requirements in excess of generating capacity is assumed to be served from the Anchorage area. The overall approach taken on this study is illustrated in Figure 1.2. As shown,five major tasks or activities were conducted that lead to the results of the project,a comparative evaluation of electric energy plans.for the Railbelt.This l'eport presents the results of this comparative evaluation.The five tasks conducted as part of the study evaluated the following aspects of electrical power planning: •fuel supply and price analysis •electrical demand forecasts •generation and conservation alternatives evaluation 1.2 FIGURE 1.1.Rai1be1t Area of Alaska Showing Electrical load Centers 1.3 = COMPARATIVE EVALUATION OF ELECTRIC ENERGY PLANS FOR THE RAILBELT LP AVAILABLE RATED CAPACITY ENERGY RESOURCE AVAILABILITY fr FIGURE 1.2.Study Approach ONGOING POWER PUBLIC I PLANNING ATTITUOE ACTIVITIES COST OF \OPERATING POWER !CHARACTERISTICS COMMERCIAL AVAILABILITY SOCIO- ECONOMIC CONSIOERATIONS ANALYSIS OF ALTERNATlIIES •HYDRO •FOSSIL •CONSERVATION •GEOTHERMAL •SOLAR •WIND ENVIRONMENTAL' CONSIDERATION!! ... •development of electric energy themes or "futures"available to the Railbelt •systems integration/evaluation of electric energy plans. Note that while each of the tasks contributed data and information to the final results of the project,they also developed important results that are of interest independent of the final results of this project. The first task evaluated the price and availability of fuels that either directly could be used as fuels for electrical generation or indirectly could compete with electricity in end-use applications such as space or water heating.In Figure 1.2 these two interactions with other tasks are represented by the arrows leading from the fuel supply and price task to the analysis of alternatives task and the electrical demand forecasting task.Fuel supply and price influences the selection of alternatives,since fuel prices often are a major determinant of the cost of power generation.As mentioned above,fuel supply and price influences the electrical demand since many fuels are direct competitors with electricity for certain end uses.For example,if the price of electricity is high relative to the price of natural gas,then more new applications will use natural gas than if the price of electricity were low relative to the price of natural gas. The second task,electrical demand forecasts,was required for two reasons. The amount of electricity demanded determines both the size of generating units that can be included in the system and the number of generating units or the total generating capacity required.In the figure these impacts are represented by the arrows pointing from the electrical demand task toward the analysis of alternatives task and toward the systems integration task. Several generation and conservation alternatives are available to the Railbelt to meet forecasted electrical demand.The third task's purpose was to identify electric power generation and conservation alternatives potentially applicable to the Railbelt region and to examine their feasibility,considering several factors.These factors include cost of power,environmental and socioeconomic effects,and public acceptance.Alternatives appearing to ~e best suited for future application to the region were then subjected to additional in-depth study and were incorporated into one or more of the electric energy plans. 1.5 The fourth task,the development of electric energy themes or plans, presents possible electric energy "futures"for the Railbelt.These plans were developed both to encompass the full range of viable alternatives available to the region and to provide a direct comparison of those futures currently receiving the greatest interest within the Railbelt.A plan is defined by a set of electrical generation and conservation alternatives sufficient to meet the"peak demand and annual energy requirements over the time horizon of We study.The time horizon of the study is from 1981 to 2010.Analyses of the cost of power also are done for the 1981-2050 time period.The set of alternatives used in each plan was drawn from the alternatives selected for further study in the analysis of alternatives task. As the name implies,the purpose of the fift~1 task,the system integration/comparative analysis task,was to integrate the results of the other tasks and to produce a comparative evaluation of the electric energy plans.This comparative evaluation basically is a description of the implications and impacts of each electric energy plan.The major criteria used to evaluate and compare the plans are cost of power,environmental and socioeconomic impacts,as well as the susceptibility of the plan to future uncertainty in assumptions and parameter estimates. The remainder of this report is divided into eight chapters and two appendices.In Chapters 2 through 6 the results of each of the five tasks are discussed.In Chapter 2 the results of the fuel price and availibility analysis are presented.The results of the electric energy forecasting activities are summarized in Chapter 3.In Chapter 4 the selection of electrical generation and conservation alternatives,as well as a list of those dlternatives selected to be inclUded in the electric energy plans,are presented.The electriC energy plans or electric energy futures are described in Chapter 5,Chapter 6 contains a description of the methodology used in the systems integration task to perform the comparative analysis.The results of the comparative analysis are presented in Chapter 7.The results of the sensitivity analyses are presented in Chapter 8.Considerations for implementing the electric energy plans are presented in Chapter 9.In Appendix A the demand forecasts are shown in detail,as well as the economic and population assumptions used in introducing the forecasts.In Appendix B the methodology used to compute the levelized cost of power is presented. 1.6 2.0 FUEL PRICE ANO AVAILABILITY In this chapter the availability and price of fossil fuels over the forecast period 1980-2010 are addressed for the Railbelt region.These fuels are covered in more detail in the Task I final report for the Railbelt Electric Power Alternatives Study.(al In the assessment of fuel availability only the in-state resource base is considered as the supply source,for two reasons.Either the available resource is sufficient to supply Alaska's needs or the cost of transporting fuels to Alaska's markets is such that in-state substitutes will be available. The Cook Inlet natural gas resource is the only fuel that may be inadequate to supply the needs of the southern part of the Rai1be1t region over the time horizon of the study,given no additional major finds.This gas could be supplemented with high-cost 1iquified natural gas (LNG)imports,but then coal, oil,and North Slope gas become reasonable substitutes. When a current price for a fuel is not available,the concept of opportunity cost is used to develop the base price and forecast.This concept provides that the resource price is equal to the price the resource will command in an alternative market,less the appropriate transportation and handling fees.Alaska is familiar with this method of price determination, which is currently used for valuation of their royalty gas and oil resources. Table 2.1 and Figure 2.1 summarize fuel availability and price faced by the electric utilities for the forecast period. 2.1 COOK INloET NATURAL GAS The supply and price of CGok Inlet natural gas is the most complex of all the Railbelt fuels because contracts have established the quantity,current price,and price escalation rate for various portions of the gas,and the terms of these contracts differ.In addition,new or incremental supplies used to meet demand in ex~ess of the contracted supply are priced by their opportunity (a)Secrest,T.a~ld W.H.Swift.1981 (Draft).Railbelt Electric Power- Alternatives Study:Fossil Fuels Availability and Price.Battelle, Pacific Northwest Laboratories,Richland,Washington. 2.1 TABLE 2.l.Fossil Fuel Availability and Price Price/106 Btu Annual Real Estimated (January 1982 Escalation Fue 1 Type Reserves Avail abil ity S's)Rate Coal Beluga/Cook Inlet 350x10 6 tons 1988 1.69 Mine 2.1% 240x10 6 Mouth Nenana/I nter i or tons Present 2.43 FOB Rail 2.~ Natura 1 Gas ( ) CO<'k Inlet a 3,900 Bcf Present 0.86 City Gate 6.6%avg North Slope/Interior 21,500 Bcf 1987 5.92 City Gate 0 Liquids/Methanol 3.lKlO Bcf 1995 No.2 Hea~ing Oil Adequate Present 6.93 Delivered 2% Peat N/A 1988 (b)<1% Refuse-Derived Fuel Anchorage 1985 Fairbanks 1988 (al (bl Volume weighted average price to Alaska Gas and Service and Chugach Electrical Association. Estimates range from 1 to 2.5 times the price of coal. value,which is the net-back from liquid natural gas (LNG)sales to Japan. Determining price for Cook Inlet gas requires a forecast of both price and quantity from each contractural source to develop the weighted average gas price for the region.The result of this forecasting is a price escalation that is not smooth over the forecast period.This uneven price escalation is evidenced in Figure 2.1 by the gas's constant price from 1980 to 1985 and the escalation over the rest of the period,with stepped increases occurring in 1990 and 1995 when major contracts expire.After 1995,the gas's price and escalation rate are determined by its opportunity value because current purchase contracts will have expired.The price of natural gas then is assumed to escalate at approximately 2%faster than inflation -the same real annual rate as for oil.Current information about Cook Inlet natural gas reserves and total demand on those reserves indicates that availability to the Alaskan market could become a major problem as early as 1990 and almost certainly by the year 2000. 2.2 NO.2 FUEL OIL 12"REAL ESCALATION) 14.00 12.00 10.00 '"a; I 8.00.. ! 6.00 4.00 2.00 13"REAL ESCALATION) "/ /./.// ./ // ..,/","----___--11"REALESCALATlON) /"----------- NORTH SLOPE-;::=--====::::::=-GAS TO INTERIORCOOKINlETGAS~\----- ••~:':":'-_-------~~~AC~~~L 1980 1990 2001 YEAR 2010 FIGURE 2.1.Projected Fuel Prices to Rai1be1t Utilities,1982 $/HM8tu,1980-2010 2.3 2.2 COAL Two sources of coal are available to the Rai1be1t.The Usibe11i mine located at Healy is the only mine currently producing coal.The cost of this coal is assumed to escalate in real terms at the historical rate.A second potential source is the Beluga coal field,which has been targeted as a source of supply for the Anchorage area and as export to markets on the Pacific Rim. As discussed below,this field may enter production about 1988.8e1uga coal is expected to escalate at the same rate as other coal supplies serving the Pacific Rim export market at a real rate of about 2.1%annually. Note that a great deal of uncertainty is involved in developing the Beluga coal fields.These coal fields are now in the exploratory and predeve10pment phase.The coal has yet to be produced in any significant quantity and thus, from an availability standpoint,must be considered prospective.Located in an area with very little to no infrastructure development,these fields,while containing very large reserves,are not likely to produce coal unless a firm market of 5 or more million tons per year can be established.On an electric power equivalent basis,this annual tonnage amounts to'1400 MW of base load coal-fired power generation capacity. If coal-fired power genel'ation becomes a significant factor in the Rai1be1t,generation capacity most likely would be added in increments of 200 or 400 MW.This staging requirement appears not,in itself,to support opening of the Beluga fields.As a reSUlt,the establishment of an export market is a necessary precursor to the availability of Beluga coal for in-state use.While the Beluga fields could be developed for electrical generation only,the reduced scale of such an operation would increase production costs markedly. 2.3 PEAT Alaska has substantial peat reserves,although these reserves have not been comprehensively assessed.The peat resource is assumed not to be developed before Beluga coal.Although information for peat development in Alaska is lacking,a preliminary feasibility study (EKONO 1980)estimates a range of likely prices from about 1 to 3 times the price of coal on a Btu basis,depending upon the harvesting and processing method used.The only real escalation likely to occur is that associated with transportation and handling, set at less than a 1%real annual rate. 2.4 Based upon current resource information and existing steam-electric generating technology,peat does appear to be a competitive fuel for e1ectrica', generation in the Rai1be1t.However,because of the extensive peat resources available within the area,it appears to warrant further investigation as technologies to use peat are further developed. 2.4 REFUSE-DERIVED FUEL The refuse-derived fuel (RDF)resource is limited to the two municipalities of Anchorage and Fairbanks.The resource has three problems: 1)limited availability,requiring RDF to be mixed with other fuels for electricity generation,2)seasonality (more refuse is generated in the ~'!mmer than in the winter),and 3)limited storage life.However,it has two offsetting factors:1)zero cost since people place no value on refuse,and disposal costs already exist to refuse producers,and 2)the only real escalation expected is in transportation and handling.A limited amount of RDF generation appears feasible. 2.5 NATURAL GAS INTERIOR The North Slope reserves of natural gas are sufficient to supply the Alaska Natural Gas Transportation System (ANGTS)to capacity (2 to 2.4 Bcf/day) for the forecast period.This ges may begin flowing in 1986 or 1987.If only Alaska's royalty share is d~verted to serve the Fairbanks area,the supply of gas would be about 100 Bcf per y~ar.A current estimate of the delivered price of gas to the "lower 48"is about $1O/t4MBtu in 1982 dollars with the January 1982 maximum wellhead price of $2.13/MMBtu.The net-back provides a city gate price to Fairbanks of about $S.9S/MMBtu.This gas is not scheduled to decontrol under existing law and escalates only with the rate of inf1ati~~, so it remains constant in real terms. 2.6 NATURAL GAS LIQUIDS/METHANOL The delivery of natural gas liquids (NGL)to t~e Rai1be1t depends on the construction schedule of the ANGTS and the real price of crude oil.Current plans call for construction of an NGL pipeline following the ANGTS,with a real crude oil price in the range of $50 to $S2/barre1.This schedule provides for delivery of NGL in the mid to late 1990s. 2.5 Methanol production is tied closely to the ANGTS because the natural gas from that system would serve as the feedstock,but the timing of methanol production appears.to be tied to petrochemical production that may accompany the NGL pipeline.Current methan~1 prices have been in the range of ~.90 to ~1.00/ga1.The net-back prir.e at Alaska tidewater would range from SO.85 to ~0.g5/ga1 or ~1~.29 to ~14.8o/MMBtu.This price must incorporate Fairbank's city gate price for the methane feedstock of~$5.92/MMBtu,suggesting that production and transportation costs from Fairbanks to tidewater can be no greater than $7.34 to ~8.91/MMBtu.Currently,methanol production is not cost competitive with other fuels in the "lower 48"and is not projected to become cost competitive until after the year 2000. 2.7 FUEL OILS Refined petroleum products are the only fuels in which Alaska is currently not self sufficient.Alaska is not self sufficient because of insufficient refinery capacity for some products,rather than lack of r~sources.Alaska's royalty share of crude oil production is sufficient to meet in-state consumption at least throl'gh the year 2000,but refined products are imported. The supply of petroleum products is not believed to be a problem through the forecast period,however.The current price of utility fuel oil of ·"~6.90/MMBtu is a good indicator of its current opportunity value,especially in view of the recent price decontrol on oil.This oil is expected to escalate at a 2%annual real rate along with crude oil.Figure 2.1 also shows the price of No.2 oil over the forecast period for real annual escalation rates of 1% and 3%. 2.6 3.0 ANNUAL PEAK LOAD AND ENERGY REQUIREMENTS FORECASTS !n this chapter the demand analysis for the Railbelt Electric Power Alternatives Study is discussed.The demand analysis for this study produces forecasts of annual electrical energy and peak elect~ic demand requirements for the Railbelt region and its three principal load centers:the Anchorage-Cook Inlet area,the Fairbanks-Tanana Valley area,and the Glennallen-Valdez area. These forecasts are internally consistent estimates of power needs that take into account the following effects on the Railbelt region: •future economic and population growth •future changes in the age,size,and energy-use characteristics of households •future growth in commercial building stock •future price and availability of fuel oil,natural gas,and wood •cost of power from specific combinations of conservation and electrical generation that could be used to meet power demands •public policy actions directly affecting energy demand or the cost of" power •possible new major uses of electric power,such as industrial use in manufacturing. Since groups of these factors may interact in complex ways to produce a range of possible (but not equally plausible)forecasts,computer models of the interaction process were developed to determine how these factors individually and jointly affect demand estimates.The models,together with certain key assumptions concerning Alaska's economy,Alaska public policy,and world prices for fossil fuels,produced contingent forecasts of electricity demand at five year intervals beginning from 1980.The demand forecasts were used as the basis for power planning in the study. 3.1 3.1 DEMAND FORECASTING PROCESS Fig~re 3.1 shows the electricity demand forecasting process used.As envisioned in the study plan,the forecasting process contains two steps.The first step combines sets 'of consistent economic and policy assumptions (scenarios)with economic models from the Universit)'of Alaska Institute of Social and Economic Research (ISER)to produce forecasts of future economic activity,population,and households in the Railbelt region a~d its three load centers.In the second step,these forecasts are combined with data on current end uses of electricity in the residential sector,data on the size of the Railbelt commercial building stock,data on the cost and performance of conservation,and assumptions concerning the future prices of electricity and other fuels,and future new uses of electricity to produce demand forecasts. (See Chapter 2.0 for a discussion of fuel prices and availability.) The economic and population forecasts,energy use data,and other assumptions are all entered into a computer-based electricity demand forecasting model called the Railbelt Electricity Demand (RED)Model.(a)The RED model generates forecasts of housing stock and commercial building stock and the price-adjusted intensity of energy use in both the residential and commercial (including government)sectors.It also adds estimates of major industrial electrical energy demand and miscellaneous uses such as street lighting.These forecasts are adjusted for specific energy conservation policies,then these major end-use sector forecasts are combined by the model into forecasts of future annual demand for electric energy for each of the Railbelt's load centers.The combined annual loads are adjusted by an annual load factor to estimate future annual peak demand by load center.Finally,the peak loads are added together and multiplied by a diversity factor (to adjust for the fact that peak loads for different load centers do not coincide)to derive peak demand for the Railbelt. The projected cost of power affects these forecasts.Because the size of demand for power affects the size,number,and cost of generating facilities that may have to be built to meet the demard,which in turn affects the cost of power,several pas.3es through the RED model with constant economic assumpt ions (a)A complete description of the RED model is contained in King and Scott 19B2. 3.2 ECONOMIC SCENARIOS •PRIVATE ECONOMIC AGTIVITY •STATEFISCAL POLICY '"'" ECONOMI C MOOELS •ISER STATEWI DE MODEl •REGIONAlIZATION MODEL •HOUSEHOLD FORMATION ! ECONOMIC,INDUSTRIAL, POPULATION AND HOUSEHOLD :J INPUT DATA AND ASSUMPTIONS •END USE SURVEY •CONSERVATION PERFORMANCE AND COSTS •FUEL COSTS •COMM£RCIAL BUILDING STOCK ! END USE MODEL IREDI 1 ELECTRI C ENERGY CONSUMPTION FORECASTS •ANNUAL ENERGY •PEAK DEMAND FIGURE 3.1.Electric Power Forecasting Process and varying costs of power are required to produce a final forecast.(The convergence process is described more fully in Chapter 6.0 of this report.) 3.2 ECONOMIC SCENARIOS The economic scenarios used to produce the demand forecasts are summarized in Figure 3.2.As shown in the figure,the scenarios are characterized by combinations of assumptions concerning private economic activity and State of Alaska fiscal policy.The private economic assumptions are principally composed of assumed levels of development in Alaska's basic or export sector. A summary of the private sector projects and growth rates is contained in Appendix A to this report.More detail can be found in Goldsmith and Portpr (1961),a report on the Railbelt economy done for this study by ISER.Because the future spending of the State of Alaska is expected to be a major driving force in the Alaskan economy during the tim~horizon f0r this study (1980- 2010),some level of state spending in each forecast year also had to be assumed to derive an economic forecast.The following are three basic ,scenarios: •High -Spending grows at 1.5 times the growth rate of real per capita income in Alaska. •Moderate -Spending grows at the same rate as real per capita income. •Low -Spending is constant in real per capita terms (falls as a percent of real per capita income). Figure 3.2 shows possible combinations of private economic activity and state fiscal policy,from which the scenarios analyzed in the study were chosen.The combinations of high basic sector grJwth and high spending,moderate growth and spending,and low growth and spending constitute the basic scenarios.The high case lcase HH)has been given a subjective probability of 0.05 to 0.10. That is,the project team believes only a 5 to 10%chance exists that economic growth will exceed the level in the highest case.The moderate case (case MM) is given a 0.5 probability.That is,a 50%chance exists that growth will be at least as large'as in case MM,and a 50%chance that it will be larger.The low case lcase LL)is given a probability of O.g to 0.95.That is,a gO%to 95%chance exists that economic growth will be at least the case LL level,and only a 5 to 10%chance that it will be less. 3.4 PRIVATE ECONOMIC ACTIVITY HIGH MODERATE LOW HIGH ~ <5asc..MODERATEV> ~....<.... V> LOW HH,SH MM,1M,CC LL HH HIGH ECONOMIC GROWTH,1M MODERATE ECONOMIC HIGH STATE SPENDING GROWTH,MODERATE STATE SH HIGH ECONOMIC GROWTH,SPENDING,PLUS EXTRA INDUSTRIAUZATIUNHIGHSTATESPENDING,PROJECTSPLUSEXTRA INDUSTRI AUZA TlON CC MODERATE ECONOMIC PROJECTS GROWTH,NON-SUSTAINABLE MM MODERATE ECONOMIC SPENDING GROWTH,MODERATE STATE LL LOW ECONOMI C GROWTH, SPENDING LOW STATE SPENDING FIGURE 3.2.Economic Scenarios 3.5 Figure 3.2 also defines three sensitivity cases analyzed in the study. The first two ca~es,Cases SH and 1M,measure the effect of major industrialization projects on the Railbelt's economy,population,and electrical demand.One school of thought believes that major manufacturing activity could be drawn to Alaska by the prospect of abundant and perhaps relatively inexpensive energy.Previous work by Battelle-Northwest and others (Swift et al.1978;Dow-Shell 1981)suggests that currently this is not very likely;however,an ongoing study on this specific question is being done for the State of Alaska.(al Without prejudging the result of the current study, the Battelle-Northwest team added several large industrial energy users to the middle and high scenarios to determine the effect on Railbelt electricity use under the following assumvtions:(1)large industrial energy users are located in the Railbelt and (2)they purchase the bulk of their electric power from the utilities in the region.Details are given in AppendiX A and in Goldsmith and Porter (1981).The third sensitivity case (CCl reflects the concern of a school of thought that believes that the State may be on a course of spending that will not be sustainable after the Prudhoe Bay oil field's main reservoir's oil production begins to decline in the 1990's.Without attempting to assess the probability of such a set of events,the Battelle-Northwest team and ISER constructed a scenario that showed very high capital spending in the 1980s. Details on the assumptions in this case are shown in Goldsmith and Porter (1981). Several other sensitivity tests that did not involve changes in economic activity were also analyzed (see Chapter 8.0).Among the most interesting is the effect of a major state direct cash investment to defray part or all of the capital cost of electrical generation facilities.This defrayal in itself is sufficient to sUbstantially reduce the price of power to the consumer.This reduction results in a large increase in demand.For purposes of this sensitivity test,reducing the price of power is assumed not to affect the le·ve 1 of economic growth.(Such price-i nduced economic growth may occur,but sufficient research has not been done on the question to say how large the growth response might be.) (al SRI,International for the Governors Office,Division of Policy Development and Planning. 3.6 3.3 ISER ECONOMIC MODELS The scenarios described above were entered into a set of three economic models modified by ISER specifically for the study.The first of these models was the ISER econometrically-based economic and population model of Alaska, usually called MAP,the acronym of the National Science Foundation research program that produced it (Man in the Arctic Program).MAP model outputs of statewide employment by broad sectors (basic,support,and government)and statewide population were next entered into a regionalization model,produced specifically for this project,that allocates economic growth to the Alaska census divisions and then reaggregates the results to Railbelt's electrical demand (load)centers.The regionalization model is based on a linear programming routine that minimizes the costs of providing economic services. The third model was a statewide household formation model that derived estimates of the total number of households in the state from the age-sex population distribution produced by the MAP model and age-specific household formation rates.Several key parameters in the MAP modeling framework underwent extensive testing,and econometric equations of the model were reestimated based on actual data through 1979 (and where data were available, through 1980).Details of the research conducted by ISER on the models are contained in Goldsmith and Porter (1981). 3.4 ECONOMIC .'ND POPULATION FORECASTS Figure 3.3 summarizes the Railbelt population forecasts produced using the MAP and regionalization models.In the figure,the solid-line forecasts to the year 2000 were produced by the MAP model.The population forecasts were then extrapolated to the year 2010 (dashed lines).The detailed employment, population,and household ·orecasts for the Railbelt and its load centers are reported in Appendix A of this report.As Figure 3.3 shows,growth rates for population vary considerably among cases.Most cases show decelerating growth during the period.The basic case is moderate-moderate case (case MM),which shows an annual rate of population growth averaging 3.4%during the 1980s and declining subsequently to yield 30-year-average annual population growth of 2.1%per year.The 90 to 95%confidence interval growth case -high growth, 3.7 900 800 700 600 500 400 300 ANNUAL GROWTH RATE$, ('/0' 200 CASE YEARS SH HH 1M MM II CC 1980-1990 5.3 5.1 4.2 3.4 2.5 4,8 100 1990-2000 3.6 3.2 2.5 2.0 LO 0.0 2000-2010 3.5 3.2 2.4 LI LO 2.2 1980-2010 4.1 3.8 3.0 2.1 L5 0.8 1980 1985 1990 1995 2000 2005 2010 FIGURE 3.3.Railbelt Population 3.8 high state spending (case HH)-yields an average growth rate of 3.8%.The low- low case (case LL)at the other end yields 1.5%growth.The cases that test large project industrialization sensitivity.add about 0.3 to O.g%to growth rates in the high and moderate cases,respectively. The nonsustainable spending case (Case CC)behaves much differently than the other cases.Based on moderate private sector economic growth and very high state government capital spending,this case shows growth rates in the 1980s comparable to those in the high case.With the decline in oil revenues projected for the 1990s in the nonsustainable spending case,population growth first stagnates,then falls as employment declines.Population falls beiow the low case about the year 2003 and continues downward to about its 1985 level. Again,as in the industrialization case,no prObability estimate is attached to this sensitivity case. 3.5 DEMAND MODEL The RED forecasting model can best be described as a partial end- use/econometric model.Estimates of total residential demand are built up by forecasting the number of energy-using devices and aggregating their potential electricity demands into preliminary end-use forecasts.The model then uses econometric fuel price elasticities to modify implicitly both the "fuel split" (proportion of the appliances using electricity)and total residential energy consumption.The model thus combines technical knowledge of end uses and econometrics to produce the residential forecast.The commerical/small industrial sector is treated similarly,but since little information is available on end uses in the commercial sector,demand is estimated on an aggregated basis rather than by detailed end use.Larre industrial demand is treated exogenously.Miscellaneous demand is composed of street lighting, vacant housing use and use in recreational homes and comprises 1%of the total energy used. Other important features of the RED model include a mechanism for hand·ling uncertainty in some of the model parameters,a method for explicitly including programs designed to subsidize or mandate conservation,and the ability to forecast peak electric demand by load center.The model recognizes the three 3.9 load centers:Anchorage and vicinity (including the Matanuska-~Jsitna Borough and the Kenai Peninsula);Fairbanks and vicinity;and Glennallen-Valdez.It produces forecasts for each five-year period from 1960 to 2010. Usiny default values for the model's various parameters,the model may be run in the certainty-equivalent mode,or using a distribution of values for model parameters,it may be run in the Monte Carlo mode.When run in Monte Carlo mode,the ~ode1 repeatedly simulates the demand for electricity under uncertain values for model parameters.The computer randomly selects parameter values for each pass'through the model from an assumed distribution of values for each parameter considered uncertain.The model produces a distribution of these multiple forecasts of electricity consumption by end-use sector and peak demand for each·load center for each forecast year:19B5,1990,1995,2000, 2005, 2010. Fi9ure 3.4 shows the basic relationships among the modules comprising the RED model.A simulation begins with the Uncertainty Module by selecting a trial set of model parameters,which are sent to the other modules.These parameters include demand price elasticities,appliance saturations,housing stock demand coefficients,load factors,peak demand correction factors,and penetration rates for conservation.Exogenous forecasts of population, economic activity,and retail prices for fuel oil,gas,and electricity are used with the trial parameters to produce forecasts of electricity consumption in,the residential and business modules.These forecasts,along with additional trial parameters,are used in'the conservation module to model the effects on consumption of subsidized conservation.The revised forecasts of residential and business (commercial and government)consumption are used to estimate future miscellaneous consumption.Assumed large industrial consumption is added to produce total electricity sales.Finally,the unrevised and revised consumption forecasts are used with a trial forecast of system load factor to estimate peak demand in each load center.The model then returns to start the next Monte Carlo trial. If desired,the RED model can be run with multiple passes to produce an output file of trial values for consumption by sector and system peak demand by year and load center.This information can be used by the AREEP model to plan 3.10 FORECAST •ECONOMY •POPUlATION •FUR PRICES UNCERTAINTY MODULI HOUSING STOCK MODULI .L RESI DENTIAl CONSUMPTION MODULI-r '"h BUSINESS CONSUMPTION MODULI r CONSERVATION MODULI .. LARGE MIS CEllANEOUS INDUSTRIAL CON SUM PT ION DEMAND MODULI .I .I TOTAL ANNUAL SALIS--r PEAK DEMAND FIGURE 3.4.Railbelt Electricity Demand (RED)Model 3.11 and dispatch electric generating capacity for each load center anJ year.The AREEP model produces an electricity cost estimate that can be checked against the electricity price used to run the RED model.If the price and cost of electricity are inconsistent,the RED model can be rerun in tandem with AREEP. using a new price until c0nsistency is achieved.The model usually reaches a consistent forecast in about two iterations. 3.6 DEMAND FORECASTS fhe basic electricity demand forecasts for the Rai1be1t are shown 1,; Figures "3.5 for annual energy consumption.The supply plan chosen to supply electricity to the Rai1be1t can itself cause some impacts.Therefore,to hold these effects constant,the demand forecasts in Figure 3.5 and the remainder of this section assume the base case electric energy plan (Plan lA)used in the study.The electric energy plans are explained in Chapter 5.and the effect of supply plans on demand in Chapter 7.The electricity demands for the other economic scenarios and electric energy plans are presented in Appendix A.As Figure 3.5 shows.base case (MM)future growth rate of demand for electric energy is forecasted to average·-3.0%between 1980 and 2010.for an increase in per capita use of ~0.9%per year.About ~50%probability exists that the growth rate will be greater,and about a 50%probability exists that it will be less.The low (LL)case demand grows at 2.2%per year.Only a 2.5 to 5% chance exists that growth in electricity demand would be less than this rate.(a)The high (HH)case demand shows an average growth rate of 4.3%per year.About a 95 to 97.5%chance exists that demand will be less than the amount shown. Figure 3.5 also shows the impact on demand of the three mair.economic growth sensitivity cases.The industrialization sensitivity cases add 1.4 and 2.1 percentage points to the 30-year growth rates in the high and moderate cases,respectively.which results in year 2010 demand that is 50 and 81%above the corresponding high and moderate cases.The near-term relative impact is (a)Economic growth in this case is low enough that only a 5 to 10%chance exists that it would be lower.The LL line forecasts median demand given the economic scenario.The chance of a forecast being below the LL line is then .05 to .10 (the probability of the economic scenario)times 0.5 (the probability of a forecast being below the median).or .025 to .05. 3.12 l7 16 IS 14 13 12 11 10 9 8 7 6 5 4 3 2 1 103 GWH AI.tlUAL GROWTH RAT£S lS) CASE YEARS ~1M HH MM LL CC 198\l-199O 9.8 TI 7.8 T.3 4.2 U 1990-2IXXl 5.7 6.2 L6 L7 0.3 -L4 13.' L. _:__~_:~__~_~_~_.4_1_~_·~__~_.~__~_~_-_t_~-,/.5" n.o. 1~11.'~,.,.:;/1·'"• 7"/""• •.••6.,~_. '.'.-6.JeW" ./---..~~.~"9 5.0 •,,'~~'{;;:;>'S:..•..-/LL 3.2 ~~1 ,.O~._ ,!..__",",e..:~_.-"':---,--.•.ecc 2~J.O 1980 1985 1990 1995 YEARS 2010 FIGURE 3.5.Rai1be1t Annual Electricity Demand,1980-2010 3.13 e'len greater.The industrialization scenarios,however,are quite unlikely at the costs of power in the 60 to 80 mill range projected for the moderate case. Conversely,the unsustainable spending ca.e (CC)shows only 1.0S average annual growth in demand during the period,with ten-year average annual rates varying between 6.3S and minus 1.8S.Per capita use,which grows at 0.9S in the MM case and as high as 2.1S annual in the 1M case,grows in the CC case at only 0.2S annual average over the forecast period.The CC case results in demand that is about 400 GWh above the MM case in 1990,but about 2900 GWh per year below the MM case in the year 2010.Because the unsustainable spending (CC) case is 50 heavily dependent on state fiscal policy,no probability is attached to it.However,it is a possibility. Figure 3.6 shows the corresponding Railbelt peak demand for the demand cases in Figure 3.5.The 9rowth rates in peak demand in the three basic cases (HH,MM,LL)average O.lS faster than the corresponding growth rates in annual energy demand,e.g.,moderate case peak demand averages 2.9S per year.These growth rates are faster because the ratio of system peak load to annual electrical load is assumed to remain constant.throu9hout the forecast period. (This ~ssumption is relaXed in Chapter 8,wher~the load factors are allowed to vary.)(a)In the industrialization sensitivity cases,SH and 1M,major industrial electricity users are assumed to be primarily year-round electrical energy users,contributin9 proportionately less to system peak than to annual consumption.Peak demand average 9rowth rates in these cases are 1.OS less than annual energy growth rates.The industrialization projects result in a net increase of 400 MW over the high case and 530 MW of demand over the moderate case in the year 2010.The unsustainable spending case (CC)again results in the lowest demand by the year 2010,a decline of 2BS from 1990 demand,and 44S (560 MW)below the base case MM. (a)As a part of the study an attempt was made to determine the impact of changing energy uses on peak load.However,Railbelt utilities were unable to break out the effect of end uses in current (1981)peak demand. 3.14 CC "IT -U -18 0.9 MMll TI 4.0 U 0.2 2.2 2.1 2:9 TI "../:_,5H •1190170~,".........-:/.~':.,----..;,:~7/'f60--'''it,__--12:-------~MM 1020 lOj~I "0.IOOO.LL ",'--'"'''1---...:.=--no .10 :~_!_--_7~70fJecc ANNUAL GROWTH RATtS ('10) CASE--- SH 1M HH 8.0 6.7 7.0 3.8 3.8 U 2.4 L9 3.6 TI 4.T TI YEARS 1980-1990 i990-2OOO 2000-2010 1980-2010 ..,.. 500 2000 '.soo 1000 3000 2010200520001990198519801995 YEARS FIGURE 3.6.Railbelt Annual Peak Demand,1980-2010 3.15 4.0 SELECTION ANO ANALYSIS OF ELECTRICAL ENERGY GENERATING ALTERNATIVES In this chapter the selection and analysis of electric power generation and conservation alternatives included in Railbelt electric energy plans are described.The first section provides an overview of the selected generation alternatives,including a technical description,the rationale for selection, and the prototypical plants and sites used to develop the data required for assessing Railbelt electric energy plans.This section concludes with a summary of important·cost and performance characteristics of the selected generation and conservation alternatives.The second section provides an overview of the selected conservation alternatives,inc uding a description of the technologies and the rationale used for their selection. 4.1 SELECTION OF GENERATING ALTERNATIVES FOR STUOY Selecting generating alternatives for the Railbelt electric energy plans proceeded in three stages.First,a broad set of candidate technologies was identified,constrained only by the availability of a suitable resource base in the Railbelt and availability of the technology for commercial service prior to year 2000.After a study was prepared on the candidate technologies,they were evaluated based on several technical,economic,environmental and institutional considerations.Using the results of that study,a subset of more promising technologies subsequently was identified.Finally,prototypical generating facilities (specific sites in the case of hydropower)were identified for further development of the data required to support the analysis of electric energy plans. A wide variety of energy resources capable of being applied to the generation of electricity is found in the Railbelt.Resources currently used include coal,natural gas,petroleum-derived liquids and hydropower.Energy resources currently not being used but which could be developed for producing electric power within the planning period of this study include peat,wind power,solar energy,municipal refuse-derived fuels,and wood waste.Light water reactor fuel is manufactured in the "lower 48"states and could be readily supplied to the Railbelt,if desired.Candidate electric generating technologies using these resources and most likely to be available for commercial order prior to year 2000 are listed in Table 4.1.The 37 generation 4.1 TABLE 4.1.Candidate Electric Energy Generating Technologies for the Rai1be1t Resource Principal Sources Fuel GenercUon Tftieal Avallabllltv for Base for Rat1belt Conversion Technology App teat.1on r.o~rc1al Orrlpr Coal Beluga Field,Cook Inlet Crush Dtrect-Fired Steam-Electrte Baseload Currently Available Nenana Fteld,Healy Gas 1ft cation lltrect-Ftred Steam-Electric Baseload 1985-1990 C",""Ined Cycle Base load/Cve 11n.1985-1990 Fuel-Cell -C",""tned-Cyel.Baseloa<l 1990-1995 llquehctton Direct-Fired Stealn-Electr1c Baseload 1985-1990 COIIlb tned Cye Ie Base load/Cye Itng 19B5-1990 Fuel-Cell Statton Base load/C.ye 11n9 1985-1990 Fuel-Cell -Comblned-C,yele Base loaet 1990-1995 Natura 1 Gas Cook In let None Direct-ftred Steam-Electric Base load Currently Avatl~hle North Slope Combined Cycle Baseload/C,ve 1tng Currently Avallftble Fuel-Cell Statton Baseload/Cyellng 1995-1990 Fuel-Cell -Comblned-Cyele Base 1olld 1990-1995 Ca-bustton Turbfne Base load/Cye Itng Currently AV111lahle "'"Petroleum Cook Inlet Refine to Dlrect-Ftred Steam-Electric Base loaet Currently Available N ""rth Slope distillate and COIIlblned Cycle Baselnad/Cye ling Current.l,V Ava llab Ie residual fractions Fuel-Cell Stations Base lnad/eye 11n9 1985-1990 Fuel-Cell -Combined-Cycle Base load 1990-1995 Combustion Turbine Baseload/Cye 11ng Current 1.V Avlt 11llh le Dtesel Electrtc Base load/Cye I In.Currently AVlllilable Peat Kena 1 Pen t nsu 1a None Dtrect·Flred Steam-Electric Baseload Currently Avallahlp lower Susitna Valley Gasification Dtrect-Fired Steam·Electrk Base load 1990-2000 COIIlbined Cycle Base load/C,vc llnQ lQ90-2000 Fuel-Cell -Combtlled-Cyele Baseload I 990-?OOO Municipal Refuse Anchorage Sort &Classify Direct-Fired Steam-Electrtc Boseload!a)Currently Avatlahle fatrbanks Wood Waste Kenai H09 Direct-Fired Steam·Electric Baselo.d!·)Currently Available Anchorage Nenana fairbanks TABLE 4.l.(contd) Resource Principal Sources File 1 Generation Typic.1 AVil11ahtlttv for Base for R.l1belt Convers ton Techno I09Y ApI>lIc.t I,!!,_ComltP.rc la I Ol'rler Geothermal Wrange 11 Mountains --Hot Dry Rock-Ste~-£lectric 8aseload 1990-2000 Ch igoott Mounta Ins --Hydrothe"'il l-Steam-E lee tr it Base load Currpntlv Av~tlahle lIydroeleetric Kenai Mountains --Conventional Hydroelectric Bos.load/C.vc ling Currently Avallahlp Alash Range --Sola l1-Sc.le Hydroe lee tric Ib)Currently Available Mlcrohydroeleetrlc Fuel Saver Currently Avatlahle Tid.l Power Cook In let --Tid.l Elee trlc rue 1 Savel'Current.lv Aval1tl1ble Tld.l Eleetrlc w/Retl...B.se load/Cye ling Current 1.'1 AVlilah le Wind Isabe 11 Pass --Large Wt nd Energy Sys tellls fuel Saver 1985-1990 Offshore Sol.ll Wind Energy Systems fuel Saver 19B5-1990 Coastal..Sol.r Throughout Region --Solar Photovolta1c fuel Saver 1985-1990.Sol.r The .....l Fuel S...r 1995-2000 Co> Uran'.IlIIPort Enrichment'ltght Water Reactors Base load Currently Available Fabr1catton (0)Suppl.....,t.l firln9 (w/co.l),,",uld be required to support b.selo.d oper.tl..,due to cyellc.l fuel supply. (b)May be base load/cyc'itng or fue 1 saver depend tng upon reservotr capac tty. technologies and combinations of fuel conversion -gen~ration technologies shown in the table comprised the candidate set of technologies selected for additional study.Further discussion of the selection process and technologies rejected from consideration at this stage are provided in King,et al.1982. "Technology profiles,"describing the technical performance and cost, environmental and socioeconomic characteristics,and potential Railbelt applications of the candidate technologies were prepared (King,et al.1982). The information developed in the profiles was used in the analysis of the candidate technologies to determine which were sufficiently promising to be included in Railbelt electric energy plans.This selection was based on the following considerations: •the "availability and cost of energy resources •the likely effects of minimum plant size and operational characteristics on system operation •the economic performance of the various technologies as reflected in estimated busbar power costs •public acceptance,both as reflected in the framework of electric energy plans within which the selection was conducted and as impacting specific technologies •ongoing Railbelt electric power planning activities. From this analysis,described more fully in King et al.(1982)13 generating technologies were selected for possible inclusion in the Railbelt electric power plans.For each nonhydro technology,a prototypical plant was defined to facilitate further development of the needed information.For the hydro technologies,promising sites were selected for further study.These prototypical plants and sites constitute the generating alternatives selected for consideration in the Railbelt electric energy plans.In the following paragraphs each of the 13 preferred technologies is briefly described,along with some of the principal reasons for its selection.Also described are the prototypical plants and hydro sites selected for further study. Coal-Fired Steam-Electric Plants.Coal-fired steam-electric plants combust coal in a boiler,producing steam that is used to drive a steam turbine-generator. 4.4 Coal-fired steam-electric generation was selected for consideration in, Rai1be1t electric energy plans because it is a commercially mature and economical technology that potentially is capable of supplying all of the Rai1be1t's base-load electric power needs for the indefinite future.An abundance of coal in the Rai1be1t should be mineable at costs allowing electricity production to be economically competitive with all but the most favorable alternatives throughout the planning period.The extremely low sulfur content of Railbe1t coal and the availability of commercially tested oxides of su1pher (SOx)and particulate control devices will faci1it~te control of these emissions to levels mandated by the Clean Air Act.Principal concerns of this technology are environmental impacts of coal mining,possible ambient air-quality effects of residual .SOx'oxides of nitrogen (NO x )and particulate emissions,long-term atmospheric build up of CO 2 (common to all combustion-based technologies)and the long term susceptabi1ity of busbar power costs to inflation. Two prototypical facilities were chosen for in-depth study:in the Beluga area a 200-MW plant that uses coal mined from the Chutna Field,and at Nenana a plant of similar capacity that uses coal delivered from the Nenana field at Healy by Alaska Railroad.The results of the prototypical study are documented in Ebasco Services Incorporated (l982c). Coal Gasifier -Combined-Cycle Plants.These plants consist of coal gasifiers producing a synthetic gas that is burned in combustion turbines that drive electric generators.Heat-recovery boilers use turbine exhaust heat to raise steam to drive a steam turbine-generator. These plants,when commercially available,should allow continued use of Alaskan coal resources at costs comparable to conventional coal steam-electric plants,while providing environmental and operational advantages compared to conventional plants.Environmental advantages include less waste-heat rejection and water consumption per unit of output due to higher plant efficiency.Better control of NO x 'SOx and particulate emission is also afforded.From an operatior.a1 standpoint,these plants offer a potential for load-following operation,broadening their application to intermediate loading duty.(However,much of the existing Rai1be1t capacity most likely will be available for intermediate and peak loading during the planning period.) Because of superior plant efficiencies,coal gasified -combined-cycle plants 4.5 should be somewhat less susceptible to inflation fuel cost than conventional steam-electric plants.Principal concerns relative to these plants include land disturbance resulting from mining of coal,COZ production,and uncertainties in plant performance and capital cost due to the current state of technology development. A prototypical plant was selected for in-depth analysis.This ZOO-MW plant is located in the Beluga are~and uses coal mined from the Chuitna Field.The plant would use oxygen-blown gasifiers of S~.ell design,producing a medium Btu synthesis gas for combustion turbine firing.The plant would be capable of load-following operation.The results of the study of the prototypical plant are described in Ebasco Services Incorporated (198Zd). Natural Gas Combustion Turbines.These plants consist of a combustion turbine that is fired by natural gas and that drives an electric generator. Although of relatively low efficiency,natural gas combustion turbin2s serve well as peaking units in a system dominated by steam-electric plants. The short construction lead times characteristic of these units also off~r opportunities to meet unexpected or tempora~y increases in demand.Except for production of COZ'and potential local noise problems,these units produce minimal environmental impact.The principal economic concern is the sensitivit.y of these plants to escalating fuel costs. Because the costs and performance of combustion turbines are relatively well understood,and because a major component of future Railbelt capacity additions most likely would not consist of combu~tion turbines,no prototype was selected for in-depth study.Analysis of this technology within the context of Railbelt electric energy plans was based on data compiled in the technology profiles (King et al.198Z). Natural Gas -Combined-Cycle Plants.These plants consist of combustion turbines that are fired by natural gas and that drive electric generators. Heat recovery boilers use turbine-exhaust heat to raise steam to drive a steam turbine generator. Natural gas -combined-cycle plants were selected for consideration because of the current availability of low-cost natural gas in the Cook Inlet area and the likely future availability of North Slope supplies in the Railbelt (although at prices higher than those currently experienced).Combined-cycle 4.6 plants are the most economical and environmentally benign method currently available to generate electric power using natural gas.The principal economic concern is the sensitivity of busbar power costs to the possible substantial rise in natural gas costs.The principal environment~l concern is CO 2 production and possible local noise problems. A nominal 200-MW prototypical plant was selected for further study.The plant is located in the Beluga area and uses Cook Inlet natural gas.The results of the analysis of this prototype are documented in Ebasco Services Incorporated (1982e). Natural Gas Fuel-Cell Stations.These plants would consist of a fuel conditioner to convert natural gas to hydrogen and CO 2 ,phosphoric acid fuel cells to produce DC power by electrolytic oxidation of hydrogen,a power conditioner to convert the DC power output of the fuel cells to AC power. Fuel-cell stations most likely would be relatively small and sited near load centers. Natural gas fuel-cell stations were considered in the Railbelt electric energy plans primarily because of the apparent peaking duty advantages they may offer over combustion turbines for systems relying upon coal or natural-gas fired base and intermediate load units.Plant efficiencies most likely will be far superior to combustion turbines and relatively unaffect~d by partial power operation.Capital investment cost most likely will be comparable to that of combustion turbines.These cost and performance characteristics should lead to significant reduction in busbar power costs,and greater protection from escalation of natural gas prices compared to combustion turbines.Construction lead time should be comparable to those of combustion turbines.B~cause environmental effects most likely will be limited to CO 2 production,load- center siting will be possible and transmission losses and costs consequently will be reduced. No prototypical plant was selected for further stu~y.Data for the analysis of these facilities in the context of Railbelt electric energy plans were taken from the technology profiles. Natural Gas -Fuel-Cell -Combined-Cycle.These plants would consist of a fuel conditioner that converts natural gas to hydrogen and carbon dioxide, molten carbonate fuel cells that produce DC power by electrolytic oxidation of hydrogen,and heat recovery boilers that use waste heat from the fuel cells to 4.7 raise steam for driving a steam turbine-generator.A power conditioner converts the DC fuel cell power to AC power for distribution.If they attain commercial maturity as envi~:oned,fuel-cell combined-cycle plants should demonstrate a substantial improvement in efficiency over conventional, combustion turbine-combined-cycle plants.Although the potential capital costs of these plants currently are not well known,the reduction in fuel consumption promised by the forecasted heat rate of these plants would result in a baseload plant less sensitive to inflating fuel costs and less consumptive of limited fuel supplies than conventional combined-cycle plants.An added advantage is the likely absence of significant environmental impact.Operationally,these plants appear to be less flexible·than conventional combined-cycle plants and will be limited to base load operation. Because of the early stages of development of these plants,additional study within the scope of this project was believed to yield little additional useful information.Consequently,no prototypical olant was selected for study.Information to support analysis of Railbelt electriC energy plans was drawn from the technology profiles. Conventional Hydroelectric Plants.A substantial hydro resources are present in the Railbelt region.Much of this could be developed with conventional ("·15 MW installed capacity or larger)hydroelectric plants. Several sites have the potential to provide power at first-year costs competitive with thermal alternatives and have the added benefit of long-term resistance to effects of inflation.Environmentally,hydroelectric options are advantageous because they produce no atmospheric pollution or solid waste. However,the principal environmental disadvantages include the destruction and transformation of habitat in the area of the reservoir,destruction of wilderness value and recreational opportunities,and negative impacts on downstream and anadromous fisheries.High capital investment costs render many sites noncompetitive with alternative sources of power. Several conventional hydroelectric projects were selected for consideration in Railbelt electriC energy plans: •Bradley Lake •Chak achamn a •Upper Susitna (Watana and Devil Canyon) •Snow 4.8 •Keetna •Strandline Lake •Browne Bradley Lake was selected for consideration because of its advanced stage of planning.Information was taken primarily from its power market analysis (Alaska Power Administration 1977).The Chakachamna project is an attractive pro~Jsal for several reasons.It is a lake tap project with relatively modest capital costs and environmental effects.The proposed project is of sufficient size (up to 1923 GWh average Jnnual energy production)to make a significant contribution to meeting future Railbelt electric energy demand,yet not so large as to result in underutilization when brought on line.Data were obtained from two sources,an investigation commissioned as part of this study (Ebasco Services Incorporated 19B2b)and the ongoing Bechtel feasibility study (Bechtel Civil and Minerals 1981).The Upper Susitna project was selected for consideration because it is the reason for this study.Data were obtained from Acres American Incorporated (1981).(a) Based on envir~jmental and economic considerations,the Snow,Keetna, Strandline Lake and Browne hydroelectric projects were among several hydroelectric projects (along with the Chakachamna project discussed above and the Allison project discussed in the subsequent section)identified by Acres American (1981)as preferred hydroelectric alternatives tv the Upper Susitna project.Snow,Keetna,Strandline Lake and Browne were selected from this set as having the most favorable costs and environmental effects.Data on the SnoN,Keetna,and Strandline Lake projects were taken from the Upper Susitna Development Study (Acres American 1981).An individual study of the Browne project was commissioned,partly because of its estimated capacity and energy production,which was somewhat greater than the others,and also because of its apparently modest environmental impact (Ebasco Services Ir.corporated 1982a). Small-Scale Hydroelectric Plants.Small-scale hydroelectric plants include facilities having rated capacity of 0.1 MW to 15 MW.Several small- scale hydro sites have been identified in the Railbelt and two currently (a)Information superceding that provided in Acres American (1981)was supplied by a letter from J.D.Laurence of Acres American to J. J.Jacobsen of Battelle,Pacific Northwest Laboratories. 4.9 undeveloped sites (Allison and Grant Lake)have been s~bject to recent feasibility studies.Although typically not as economically favorable "s conventional hydro because of higher capital costs,small-scale hydro affords similar long-term protection from escalation of costs.The environmental effects of small-scale hydro tend to be proportionally less than for conventional hydro developments,especially since many at these projects are ,un-of-the-river or lake tap designs and do not involve development of a reservoir.Run-of-the-river projects,however,may be intermittent producers of power due to seasonal variation in streamflow. Two small-scale hydroelectric·projects were selected for consideration in Railbelt electric energy plans:the Allison hydroelectric project at Allison Lake near Valdez and the Grant Lake hydroelectric project at Grant Lake north of Seward.These two projects appear to have relatively favorab1e economics compared with other small hydroelectric sites,and relatively minor environmental impact (each is a lake tap project).Information to support analysis of these alternatives was taken from the feasibility study recently completed on·each (Corps cf Engineers 1981;CM 2M-Hill 1981). Microhydroelectric Systems.Microhydroelectric systems are hydrcelectric installations rated at 100 kW or less.They typically consist of a water- intake structure,a penstock,and turbine-generator.Reservoirs often are not provided and the units operate on run-of-the-stream. Microhydroelectric systems were chosen for analysis because of pub·'ic interest in these systems,their renewable character and potentially mcdest, en."ironmental impact.Concrete information on power production costs typical of these facilit'es were not available when the preferred technologies '~ere selecteL.Further analysis indicated,however,that few microhydroelec"ric reservoirs could be developed for less than 80 mills/kWh and even at considerably higher.rates,the contribution of this resource would likely be minor.8ecause of the very limited potential of this technology in the Railbelt,it was subsequently dropped from consideration.However, installations at certain sites,for example residences or other facilities remote from distribution systems,may be justified. Large Wind Energy Conversion Systems.Large wind ener·gy conversion systems consist of machines of 100 kW capacity and greater.These systems typically would be install~in clusters in areas of favorable wind resoul·ce 4.10 and would be operated as central generating units.Operation is in the fuel- saving mode because of the intermittent nature of the wind resource. Large wind energy conversion systems were selected for consideration in Railbelt electric energy plans for several reasons.Several areas of excellent wind resource have been identified in the Railbelt,notably in the Isabell Pass area of the Alaska Range,and in coastal locations.The winds of these areas are strongest during fall,winter and spring months,coinciding with the winter-peaking electric load of the Railbelt.Furthermore,developing hydroelectric projects in the Railbelt would prove complementary to wind energy systems.Surplus wind-generated electricity could be readily "stored"by reducing hydro generation.Hydro operation could be used to rapidly pick up load during periods of wind insufficiency.Wind machines could provide additional energy,whereas excess installed hydro capacity could provide capacity credit.Finally,wind systems have few adverse environmental effects with the exception of their visual presence and appear to have widespread public support. A prototypical large wind energy conversion system was selected for further study.The prototype consisted of a wind farm located in the Isabell Pass area and was comprised of ten 2.5-MW-rated capacity,Boeing MOO-2,horizontal axis wind turbines.The results of the prototype studied are provided in Ebasco Services Incorporated (1982f). Small Wind Energy Conversion Systems.Small wind energy convesion systems are small wind turbines of either horizontal or vertical axis,design rated at less than lOO-kW capacity.Machines of this size would generally be dispersed in individual households and in commercial establishments. Small wind energy conversion systems were selected for consideration in Railbelt electric energy plans for several reasons.Within the Railbelt, selected areas have been identified as having superior wind resource potential.Another reason for selection is because the resource is renewable. Finally,power produced by these systems appeared to possibly be marginally economically competitive with generating facilities currently operating in the Railbelt.However,these machines operate in a fuel-saver mode because of the intermittent nature of the wind resource,and because their economic performance can be analyzed only by comparing the busbar power cost of these machines to the energy cost of power they could displace. 4.11 Data for further analysis of small wind energy conversion systems were taken from the technology profiles.Further analysis of this alternative indicated that ?D MW of installed capacity producing ~40 GWh of electric energy._.. possible could be economically developed at 80 mill marginal power costs,under the highly unlikely assumption of full penetration of the available market (households).Furthermore,in this analysis these machines were given parity with firm generating alternatives for cost of power comparisons.Because the potential contribution of this alternative is relatively minor even under the rather liberal assumptions of this analysis,the potential energy production of small wind energy conversion systems was not included in the analysis of °Railbelt electric energy plans. Tidal Power.Tidal power plants typically consist of a "tidal barrage" extending across a bay or inlet that has substantial tidal fluctuations. The barrage contains sluice gates to admit water behind the barrage on the incoming tide,and turbine-generator units to generate power on the outgoing tide.Tidal power is intermfttent,available,and requires a power system with equivalent amount of installed capacity capable of cycling in complement to the output of the tidal plant.Hydro capacity is especially suited for this purpose.Alternatively,energy storage facilities (pumped hydro,compressed air,storage batteries)can be used to regulate the power output of the tidal facility. Tidal power was selected for consideration in Railbelt electric energy plans because of the substantial Cook Inlet tidal resource,because of the renewable character of this energy resource and because of the substantial interest in the resource,as evidenced by the recently completed first-phase assessment of Cook Inlet tidal power development (Acres American Incorporated 1981a)• The SpeclT1C alternatives considered for this study were four variations on the Eagle Bay alternative recommended for further study in the Cook Inlet tidal power study preliminary assessment: •72D-MW Eagle Bay Tidal Electric Project Without Retiming •720-MW Eagle Bay Tidal Electric Project With Pumped Storage •1440-MW Eagle Bay Tidal Electric Project 111_t Reti.ing •1440-MW Eagle Bay Tidal Electric Pro age Estimated production costs of an unretimed tidal power facility would be competitive with principal alternative sources of power,such as coal-fired power plants,if all power production could be used effectively.The costs would not be competitive,however,unless a specialized industry were established to abasorb the predictable,but cyclic output of the plant. Alternatively,only the portion of the power output that could be absorbed by the Railbelt power system could be used.The cost of this energy would be extremely high relative to other power-producing options because only a fraction of the "raw"energy production could be used.An additional alternative would be to construct a retiming facility,probably a pumped storage plant.Due to the increased capital costs and power losses inherent in this option,busbar power costs would still be substantially greater than for nontidal generating alternatives.For these reasons,the Cook Inlet tidal power alternative was not considered further in the analysis of Railbelt electric energy plans. Refuse-Derived Fuel Steam Electric Plants.These plants consist of boilers,fired by the combustible fraction of municipal refuse,that produce steam for the operation of a steam turbine-generator.Rated capacities typically are small due to the difficulties of transporting and storing refuse, a relatively low energy density fuel.Supplemental firing by fossil fuel may be required to compensate for seasonal variation in refuse producticn. Enough municipal refuse appears to be available in the Anchorage and Fairbanks areas to support small refuse-derived fuel-fired steam-electric plants if supplemental firing (using coal)were provided to compensate for seasonal fluctuations in refuse availability.The cost of power from such a facility appears to be reasonably competitive,although this competitiveness depends upon receipt of refuse-derived fuel at little or no cost.Advantages presented by disposal of municipal refuse by combustion may outweigh the somewhat higher power costs of such a facility compared to coal-fired plants.The principal concerns relative to this type of plant relate to potential reliability,atmospheric emission,and odor problems.Data for refuse-derived fuel steam electric plants were taken from the technology profiles. Information on the selected generating alternatives used for the Railbelt elE~tric energy plans was developed as described in the preceding section. 4.13 Cost and performance characteristics of these alternati"es are surrmarized in Table 1.2.Additional information on each can be obtained by consulting the references cited;completed tabu1ations.of the characteristics of these alternatives are provided in King (1982). 4.2 CONSERVATION ALTERNATIVES SELECTED FOR STUDY Two general classes of conservation measures were selected for study.The first class,residential building conservation,includes several specific measures for improving the insulation and weather tightness of residential structures.The objective of the measures is to improve the end-use efficiency of fuel use for space heating.This fuel saved may be wood,oil,natural gas or other fuels,in addition to electricity.Also included in this class are measures designed to improve the thermal insulation and efficiency of utilization for hot water heating systems.Again,the fuel conserved may be natural gas,oil or wood,in addition to electricity. The second class of conservation measures considered were those involving the substitutions of a nonelectric fuel for electricity.Consideration was limited to measures involving the substitution of a ren~wab1e resource for electricity and included passive solar space heating systems,active solar hot water and space heating systems,and wood as a residential space heating fuel. The effects of conservation alternatives in the Rai1be1t region were accounted for in developing and analyzing Rai1be1t electric energy plans by assessing the effects of these measures in reducing electric demand.The performance and cost characteristics of promising measures then were assessed. Based on the investment values of the various conservation measures,the levels of adoption were then established using the demand forecasting model.Thus, the contribution of conservation measures to meet future power needs in the Rai1be1t was expressed as a reduction in forecasted demand from levels of demand that might be experienced without conservation.Overviews of the conservation measures considered in the study are provided in the following paragraphs. 4.2.1 Residential Building Conservation Building energy conservation encompasses a variety of measures for reducing the electrical load of residential structures heated with electricity. Electrically heated structures currently comprise about 211 of Anchorage 4.14 TABLE 4.2.Summary of Cost and Performance Characteristics of Selected Alternatives C,p~HIY Heat R.t.1!!!l (Btu/kWh) 200 10,000 Bradley Late Hydroelectric 90 Ch.kac......Hydn>elee.(330 11/)(d)330 Chakac:h •••Hydroelec.(480,..,)(1)480 Upper Sus1tna (Watana I)680 Upper Sus1tna (watan~II)340 Upper Susttna (Devil Canyon)600 Snow Electric 63 I(eetn.Hydroelectric 100 Str.ndl1ne Lake Hydroelec.20(17) Browne Hydroelectric lOO(80} Allison Hydroelecttc 8 1.7 15 15 0.6 0.6 3.5 3.3 Variable 0&" (m;lls/kWh) 5 5 5 7 5 44 5 44 44 3.70 4 4 140 140 Fixed oa.M 1~/kW/vrl 16.70 16.70 14.80 48 7.30 42 50 9 2980 730 1050 890 4669 3190 3860 2100 16B 2263 5850 5480 7240 4470 4820 2840 2490 3320 Capital Cost llill1.- 2090 2150 347 8 1570 1923 3459 3334 220 395 85 430 37 94 94 94 94 94 94 94 94 94 94 36 N/A N/A Average Annual Availability Energy (<)....l§!!!ll... 87 87 as 89 as 91 83 94 9,200 5,,700 10,00:0 9,!fJO 13,I!OO(b) 8,<.'OO(t) 14,000 14,000 7 25 50 20 200 220 70 200 25 200 Alternative Hatl.6Is CoIiltned Cycle Mitl.Gas Fuel Cell Stations Hatl.&as Fuel Cell to-D.eye. Coal Steam-Elktrtc (Beluga) Coa 1 StelJD-£lectr1c (Henan.) CooIl &as1f1er-C_1ned Cycle Matl.&as CoImust1on Turbines Grant Late Hydrotlectl"1c Isabell Pass Wind Farm Refuse-Der1Yed Foe 1 Ste._Electric (Anchorage) Refuse·Oertved Fuel Steam Electric (Fa1rb.-.ks) la)Configuration in parentheses used in analysts of Railbelt electric energy plus taken from earlier estimates (Alaska Power Authority 1980) (b)..neat rate of 12.000 Btu/kill was used in analysis of Railbelt electric energy plans.13.000 Btu/kWh is probably -ere representattve of parttal load operation characteristic of peaking duty. (c)An earlier esti.ate of 8500 Stu/kWh was used in the analysis of Railbelt electric energy plans. (d)Configuration selected in prelilllinary feasibtl·ty study (Bechtel Civil and Hi neral 5 1981) (el Configuration selected in Ral1belt alternatives siudy (Ebasco 1982b) 4.15 households,9%of Fairbanks households,and 1%of Glennallen-Valdez househo1ds(a).Choice of measures and resu1tin9 energy savings depend on the siz~and age.of struc~ure and the climatic region.The cost-effective techniques on new structures include extt~insulation in the ceiling (R-60), double-wall construction (R-40),heavily insulated floors (R-40),insulated doors,triple pane windows,and careful sealing and caulking to reduce air changes from 1.0 to 0.25 (Barkshire 1981).Cost-effective measures for retrofitting existing buildings include adding insulation to the floors and ceiling to bring their insulating value up to R-40 and R-60,respectively.The walls are left at current R-va1ues because of the great expense of retrofitting.Triple-glazed windows,R-B metal insulated exterior doors and sufficient caulking and sealing to bring air infiltration down to 0.5 air changes per hour round out the assumed improvements (Barkshire 1981b). Insulation is assumed to be applied by contractors,whereas glazing,caulking, and weatherstripping are applied by the owner for purposes of cost estimating. Energy savings of new construction improvements over standard practices are 289.1 ~tu/hr per degree Farenheit below 70 0 outside temperature for. prototypical structure.For retrofits,improvements are projected to yield 189.1 Btu/hr per of. 4.2.2 Residential Passive Solar Space Heating Passive solar space heating is accomplished by using south glazing to capture solar energy in combination with a thermal mass to store captured energy for release at night or during cloudy periods.These design features generally are combined with a thermally efficient building envelope.Passive solar housing design in the Rai1be1t region has considerable potential for reducing the space heat demand of these structures.However,the homeowner's ability to use the solar resource depends on the bui;~ing's location and orientation.Also,passive solar applications are generally restricted to new buildings or additions to existing structures because of the difficulty of retrofitting an existing structure,although this is a relatively inefficient way to reduce heating bills (Barkshire 1981a and 1981b).A site survey of the (a)From a residential end-use survey con~ucted by Battelle Northwest for this study (March-April 1981). 4.16 Alternative Energy Technical Assistance program during the summer of 1981 showed about one sixth of 1200 Anchorage sites had open access to the sun the year r~und and thus would be .candidates for effective passive solar retrofit.. .'.';'.., Preliminary study by Alaska Renewable Energy Associates indicates that from one third to one half of building sites in the Rai1be1t will have solar access during the heating season.Late winter and early spring are the primary months when sunlight in the Rai1be1t region is both needed and available in sufficient intensity to provide a net heat gain.Because sunlight is not generally available during the peak heating periods of December and January,this technology is assumed to operate in a fuel-saver mode and is·given no credit for peak demand. The prototypical dwellings used for analysis of passive solar space heating are as follows.The new structure is a 15OO-square-foot house with 200 square feet of south-facing glass.No thermal storage is assumed.About 19.3 mm Btu annual net solar gain results (about 13.8 mm Btu per year more than a standard house).The prototypical solar retrofit is a 8 foot by 20 foot solar green house,·which supplies 10 to ISS of the heat required by the basic 15OO-foot house used in the calculations. Site characteristics limit penetration of passive solar space heat applications to about 35 to SOS of the new building stock,while solar greenhouses designed for retrofit are expected to be limited to 10 to ISS of the existing housing stock. 4.2.3 Residential Active Solar Hot Water (a) Active solar technology has some potential in the Rai1be1t to reduce hot water heating load.The effectiveness of these systems depends upon the amount of solar radiation available and the water heating load of the household,which in turn depends on the size and characteristics of the household.Final installed costs will vary with the type of system (draindown,antifreeze,one or two tanks),as will performance (Barkshire 1981a).Prototypical new and retrofit units examined in the study assume 80 square feet of collector using .Sola Roll-type technology because this appears to be the most cost effective. (a)Although active solar space heating designs have been advanced,they did not appear to be particularly advantageous for the Rai1be1t and thus were not considered in this analysis. 4.17 About 50%of the annual water-heating load of a family of four can be met with such an installation,at ~80 gallons per day use.The proportion of such use, which ~an be met by solar during the year,varie~by month from near zero in... November through February,to about 85%in April through June. Limitations on market penetration are expected to result from very long payback caused by high installation costs.These limitations will probably hold the total market to 5 to 10%of hot water users (Barkshire 1981a). 4.2.4 Residential Wood Space Heating Wood is already a supplementary fuel choice in many Rai1be1t communities. Unlike other dispersed technologies,wood-fired space heating is not resource or weather limited at this time.The analysis of wood-fired heating was done on the presumption that at maximum penetration,one fifth of the space heat required by homes heated with passive solar technology and one fifth of the space heat required by nonso1ar homes would be provided by wood.This is equivalent to more than a doubling of the current market penetration of wood space heat.Inconvenience,fuel cost,and difficulty in using wood in multifamily units would limit maximum market penetration,even at zero capital cost. Stoves are available in sizes with heating capabilities ranging from 15,000 to over 100,000 Btu/hr,with conversion efficiencies of 20 to 65%.The costs and performance characteristics used in the study are based on a high-quality airtight stove of heavy-age steel and soapstone. 4.18 5.0 DESCRIPTION OF ELECTRIC ENERGY PLANS The purpose of this chapter is to present the electric energy plans that are evaluated and compared in Chapters 7 and 8.These plans are defined by the set of electrical generation and conservation alternatives included in them. The generation and conservation alternatives selected to be included in these plans were presented in Chapter 4. Four electric energy plans were developed to provide a direct comparison of those electric power development strategies of interest within the State. Each plan represents a possible electric energy future for the Railbelt.The plans were selected to encompass the full range of viable alternatives available to the Railbelt: Plan 1:Base Case A.Without Upper Susitna B.With Upper Susitna Plan 2:High Conservation and Use of Renewable Resources· A.Without Upper Susitna B.With Upper Susitna Plan 3:Increased Use of Coal Plan 4:Increased Use of Natural Gas Five major factors were considered when developing these plans: •natural resources available •current generating facilities and utility plans •performance characteristics and availability of alternative generation technologies •current and forecasted requirement for electricity •results of public input. With these factors a subjectlve process was used to develop the electric energy plans.As noted above,the plans were developed to encompass the full range·of conservation and generation alternatives available to the region rather than to select the "best"plans based upon a formal selection and evaluation process. 5.1 The underlying purpose of the Railbelt Electric Energy Alternatives Study is to help determine whether the State should develop the Upper Susitna hydroelectric project or if it should pursue other alternatives;thus,two electric energy plans are inherent in the purpose of the project.Plan 1A does not include the Upper Susitna project,whereas Plan 18 does include the Upper Susitna project.The former provides the conditions for the "base case;" that is,the case against which the alternatives will be compared.Plan 1A and Plan 18 provide a direct comparison between continued development of conventional generating resources and development of conventional generating resources with the addition of the Upper Susitna project. The public meetings held as part of this project,as well as other inputs, point to widespread intere3t in both conservation and renewable energy resources.Electric energy conservation will take place as a result of price increases in all of the electric energy plans.However,a specific plan in which conservation alternatives receive greater emphasis than in any other plan should be made.This same plan logically could include renewable energy sources.Thus,Plan 2A,High Conservation and Use of Renewable Resources Without Upper Sus·:tna,and Plan 28,High Conservation and Use of Renewable Resources with Upper Susitna,were selected •. All of the supply plans analyzed in this study contain substantial conservation of electricity because the price of electricity rises during the time horizon of the study.Therefore,all the plans include some level of market penetration of the conservation technologies explicitly analyzed,as well as a variety of others that generally have low initial cost and quick payback periods.Among these unidentified techniques are weatherstripping,set- back thermostats,water heater jackets,and en~rgy-conserving lighting.Also included in the price-induced conservation forecasted by the demand model are changes in people's behavior,such as taking short~r showers,turning off lights and turning back thermostats.Low-initial-investment,quick-payback conservation is assumed to be adopted as a matter of course. To achieve maximum technical contribution of conservation,the conservation program assumed in this study goes beyond this market-induced conservation.The State of Alaska is assumed to provide a grant program to 5.2 residential electricity consumers to offset the initial investment cost of four technologies with higher initial cost and high energy payoff.Those four technologies are superinsu1ation of buildings,passive solar designs for space heating,active solar hot water heating,and wood-fired space heating.Because much less information is available about specific end uses of electricity in the business sector,the conservation supply plans re)ied on estimates of maximum average electrical conservation [done for the Oak Ridge National Laboratory commercial model (OOE 1979)]of about 35%in the business sector and corresponding estimates of minimum life cycle energy costs.The initial capital cost of achieving this maximum technical saving was then reduced to zero by an assumed business sector grant program,resulting in full technical savings. Finally,the estimated market penetration of the technologies described above for the residential sector and general electric conservation for the business sector was estimated for market conditions without subsidies.The difference between the subsidized and unsubsidized case was the impact of the conservation supply program. Coal is an attractive fuel for electrical generation in the Rai1be1t area for several reasons: •It is abundant. •Good,easily mined coal deposits are close to the load centers. •The technologies for both mining and burning coal are well established. •Projections indicate that coal will continue to be competitively priced relative to alternative fuels. An export mine most likely will be developed at Beluga and thereby will provide the Cook Inlet area with a good source of coal.Therefore,a third plan,based upon increased emphasis on coal is included:Plan 3,Increased Use of Coal. Natural gas is currently the mainstay fuel for electric generation in the Anchorage-Cook Inlet area and may become available in the Fairbanks area if and when production and transmission of North Slope natural gas occurs.The major favorable attributes associated with natural gas are its relatively low environmental impact compared to other fossil fuels,the lower capital cost per 5.3 unit of generating capacity,and the short lead time involved in makiBg capacity additions.In short,natural gas based generation is clean,flexible, and adapted to conditions of uncertain future demand. Considerable known reserves of natural gas,[~3,9OO billion cubic feet (BCF)j,exist in the Cook Inlet region.Some of this gas is committed (or dedicated)under contract to the gas and electric utilities (620 BCF);some is committed to industrial applications (ammonia and urea production)and for export (~730 BCF).Some (~830 BCF)is at least tentatively committed to the proposed (and currently uncertain)Pacific Alaska LNG project for exports to the "lower 48"states.A significant amount (~1600 BCF)of the known reserves ~ppears totally free of current commitments.However,current industrial and export users will probably compete with the gas and electric utilities for commitment of this gas to their operations. For gas reserves not currently committed under contract,the future price is subject to considerable uncertainty.At this point current reserves in the Cook Inlet do not appear sufficient to allow expanded gas use beyond 1990. Sufficient resources that might allow expanded gas generation in that area possibly are yet to be discovered. At this point,however,the possible advantages of increased use of natural gas warrant further evaluation.These considerations resulted in the fourth preliminary electric energy plan:Plan 4,Increased Use of Natural Gas. Several assumptions common to all four plans were made: •Current utility plans for additions will proceed as planned. •·Generating units will be retired based on assumed lifetimes. •An interconnection between the Anchorage-Cook Inlet and Fairbanks- Tanana Valley load centers will be completed in 1984 and strengthened as necessary to allow economical power exchanges between Fairbanks and Anchorage. •The Glennallen-Valdez load center electrical loads and generating capacity will be combined with Anchorage-Cook Inlet loads and generating capacity. 5.4 •All load centers will maintain sufficient peaking capacity to provide peak requirements in the event of interconnection failure. •The Bradley Lake hydroelectric project will be completed and will come on-line in 198B. The approach and rationale for t~e selection of the preliminary electric energy plans,as well as descriptions of the assumptions and features each plan,are contained in Jacobsen (19B1).(a) Chapter 4 presented the electrical generation and conservation alternative that were selected for further consideration in the study.These alternatives have been incorporated into one or more of the electric energy plans,as summarized in Table 5.1. In each plan,the costs of constructing the transmission systems to connect the various generating facilities to the intertied system are inclu~cd in the analysis.For example,Plan 1A includes the costs of constructing a transmission system to connect the Chakacham~a project and the coal steam- electric genf-ating plants located at Beluga with the AnchQrage-Fairbanks transmission intertie and the Anchorage-Cook Inlet transmission system.Costs also are included for the transmission facilities that are assumed to be built in conjunction with the first coal-fired steam plant added in the Beluga area. Similarily,the cost of the transmission system necessary to connect the additional generating facilities at Nenana to ~he intertie and the Fairbanks area are also included.In Plan 1A other generating facilities are assumed to be built near existing transmission lines,and the costs of connecting them to the transmission system are neglected. Because of the large size and location of the Upper Susitna project (included in Plans 1B and 2B),approximately midway between Anchorage and Fairbanks,a relatively extensive transmission system is required for this project.The costs of the transmission system necessary to connect the variou~ stages of the project with the Anchorage and Fairbanks area are included with capital costs of those stages. (a)Jacobsen,J. J.1981 (Draft).Preliminary Electric Ener9¥Plans. Working Paper 4.2.Battelle,Pacific Northwest Laboratorles,Rlchland, Washington. 5.5 TABLE 5.1.Summar;of Electrical Energy Alternatives Included as Future Additions in Electric Energy Plans Electric Energ~Plan(a) BASE LOAD ALTERNATIVES 1 II 2A B 1 4 Coal Steam Electric X X X X X Refuse-Derived Fuel Steam Electric X X CYCLING ALTERNATIVES Coal Gasifier -Combined-Cycle X Natural Gas -Fuel Cell-Stations X Natural Gas -Combined-Cycle X X X X X Natural Gas -Combustion Turbine X X X X X X Natural Gas -Fuel-Cell Combined-Cycle X Bradley Lake Hydroelectric X X X X X X Grant Lake Hydroelectric X X Lake Chakachamna Hydroelectric X X Upper Susitna Hydroelectric X X Allison Hydroelectric X X Browne Hydroelectric X Keetna Hydroelectric X Snow Hydroelectric X Strand line Lake Hydroelectric X FUEL SAVER (INTERMITTENT)ALTERNATIVES Large Wind Energy Conversion System X X ELECTRIC ENERGY SUBSTITUTES Passive Solar Space Heating X X Active Solar Hot Water Heating X X Wood-Fired Space Heating X X ELECTRIC ENERGY CONSERVATION Building Conservation X X (a)Plan 1:Base Case A.Without Upper Susitna B.With Upper Susitna Plan 2:High conservation and use of renewables A.Without Upper Susitna B.With Upper Susitna Plan 3:Increase Use of Coal Plan 4:Increase Use of Natural gas 5.6 The transmission systems for Plans 3 and 4 are assumed to be similar to the transmission system in Plan lAo In Plan 3 the additional coal-based generating facilities are assumed to be added in the Beluga area and at the Nenana area,allowing much the same system to be used.The transmission system costs in Plan 3 are assumed to be the same as in Plan lAo In Plan 4 the additional gas generating facilities in the Anchorage area are asssumed to be added in the Beluga area.The exact location for the gas-fired capacity in the Fairbanks area in Plan 4 is not specified.However,the transmission costs of connecting these facilities to Fairbanks and to the intertie are assumed to be the same as in Plan lAo 5.7 6.0 DESCRIPTION OF SYSTEMS INTEGRATION TECHNIQUES The purpose of this chapter is to briefly describe the methodology used to perform the comparative evaluation and sensitivity analyses presented in the following two chapters.The objective of the comparative evaluation is to provide a complete description of the alternative electric plans and their impacts on the Railbelt.This description includes the following information for each plan: •electrical demand,inclUding amount of conservation •electrical supply,including both capacity and generation •the cost of power - -annual costs of power -levelized cost of power • a qualitative evaluation of the environmental impacts using the following environmental evaluation criteria: -air quality -water quality -terrestrial ecology -aquatic/marine ecology -noise,visual,and odor -health and safety issues. • a qualitative evaluation of the socioeconomic impacts of each plan -creation of jobs in Alaska -boom-bust effects -access and secondary land use effects -sensitivity of plan to future inflation -dollars spent in Alaska vs.those spent outside. • a discussion ~f uncertainty and the results of sensitivity analyses. To produce this information,several different methods or tools were used.As indicated earlier in Chapter 3,the future electrical demand is forecasted using the RED and Dver/Under-AREEP Version (AREEP)models.The 6.1 AREEP model was developed by modifying an eXisting model.This eXisting model, the Over/Under Capacity Planning Model,was originally developed for the Electrical Power Research Institute (EPRI)by Decision Focus,Incorporated (EPRI 1978).The AREEP model produces information on the future electrical supply system and the cost of power.The description of the environmental and socioeconomic impacts are described qualitatively. 6.1 ELECTRICAL DEMAND AND SUPPLY FORECASTING INTERACTIONS The methodology used to forecast electrical consumption and electricity conservation was summarized in Chapter 3.0.However.as noted in Chapter 3.0. the demand for electricity is partially determined by the price of electricity.Since the price of electricity is determined by the types and performance of the facilities used to generate electricity.electricity demand forecasts require some interaction between the demand and supply forecasting methodologies.These interactions are shown in Figure 6.1. Initially,a price of electricity is assumed as input to the electrical demand model (REO Model).Using this price.as well as other input data and assumptions.the REO model produces forecasts of peak demand and annual energy for the Railbelt.The AREEP model uses these forecasts of peak demand and annual energy as input data and produces a schedule of plant additions to the electrical generation system.as well as price of electricity to the consumer. These prices can then be compared to the original price assumptions.If the two price forecasts are relatively close.then supply and demand are said to be in equilibrium and.the process is halted.On the other hand.if the two price forecasts are not relatively close.a new price estimate is made;the REO and AREEP models then are rerun.producing a new price forecast. This process is continued until the input and output prices are relatively close.In actual practice.the model user quickly develops an understanding of ha..the two models relate and equilibrium is reached with 2 or 3 model runs. 6.2 OVER/UNOER··AREEP VERSION MODEL DESCRIPTION The AREEP model is used to balance electrical supply with demand in this study. 6.2 INPUT DATA AND ASSUMPTIONS •PEAK DEMAND •ANNUAL ENERGY START 1------------I I INPUT DATA COST OF I AND ASSUMPTIONS •POWER I I I •SCHEDLU OF CAPACITY ADDITIONS I •PRESENT WORTH OF PlAN 1 ------_1 FIGURE 6.1.Electrical Demand and Supply Interactions 6..3 The primary function of the AREEP model is to compute the price of electricity to the consumer.The time horizon for this study runs from 1980 to 2010.In addition to the peak demand and annual energy data from the REO model,AREEP requires data that include capital and O&M costs for the generating alternatives to be used to meet the forecasted demand,the financial assumptions to be used in the analysis,th~fuel costs,and the desired set of the generation alternatives from which the model will select specific generating plants. In general,the computational procedure used by AREEP to determine the price of electricity for a particular case is presented in Figure 6.2.The first step is to adjust the consumption forecast developed by the RED model for transmission line losses and unaccounted energy.This adjustment determines the amount of energy that must be generated.Because tr.e AREEP model conside~'s the Railbelt an intertied electrical system,the peak demands and annual energy from each of the three load centers are added together and a single annual load duration curve is developed for the combined Railbelt area. The next step is to develop a schedule for new additions to generating capacity.Generating capacity additions are based upon the need to meet the forecasted annual peak demand,with an allowance for line losses over the time horizon of the analysis,as well as a reserve margin that allows for extra capacity in the event of unscheduled downtime of generating plants.The model accounts for retirement of eXisting plants.The type of generating alternative added is based upon a general set of alternatives that is input by the model operator.In the Railbelt study these Alternatives are identified in Chapter 4.0. Once the schedule of new plant additions is established,the capital cost and fixed cost portion of the electricity production cost can be computed.As indicated in Figure 6.2,this information is computed and Jsed to ~orecast the production cost of electricity. The next step in the computational procedure is choosing the available generating alternatives that will be used to generate electricity during any particular year.The model decides this based upon the relative variable operating costs for the alternatives.The alternative with the lowest operating costs is selected to be used (dispatched)to generate electricity 6.4 •COMPUTES ANNUAL COST OF POWER •lEVELIZED COST OF Pl1NER •PRESENT WORTH Of PIAN '"Ul DATA INPUT I AND ASSUMPTIONS • •DESCRIPTION OF GfhlRATING AlTERNATIVES •EARLIEST AVAIlABILITY Of ALTERNATIVES •FINANCIAL ASSUMPTIONS •CAPITAL,O&M,FUEL COSTS •DESIRED MIX Of AlTERNATIVES •PlANNING RFSERVE MARGIN •PEAK DEMAND •ANNUAL ENERGY DATA INPUT { •ADJUST FOR LOSSES AND UNACCOUNTED EhlRGY •COMBlhl DEMANDS FROM LOAD CENTERS •DMLOP LMD-DURATION CURVES { •MAKES CAPACITY DECISIONS BASED UPON -DESIRED MIX OF ALTERNATIVES (INPUT) -PIAt.wING RESERVE MARGIN (INPUT) { •DISPATCHES GfhlRATING ALTERNATIVES BASED UPON VARIABLE OPERATING COST •LOSS OFlMD PROBABILIlY { ANNUAL COST OF POWER FIGURE 6.2 •.AREEP Diagram first,followed by the alternatives with the next lowest variable cost.The generating alternatives are dispatched in this order until the annual energy demand is satisfied. Finally,the information on the amount of electricity produced by each generating technology is then used to compute the annual variable costs of producing electricity for the Railbelt.As Figure 6.2 shows,adding the total annual fixed costs,which were computed earlier,to the total annual variable costs produces the total annual cost of power to the consumer.The levelized cost of power of the plan is then calculated from the annual costs of power over the time horizon 1980-2010.The procedure us~d to compute the levelized cost of power is presented in Appendix B. 6.6 7.0 RESULTS OF SYSTEMS INTEGRATION/COMPARATIVE ANALYSIS In this chapter each of the electric energy plans presented in Chapter 5 is described and a comparative evaluation is made.For each plan this description includes the following information: •electrical demand •electrical supply,including both capacity and generation •the costs of power • a qualitative evaluation of the environmental and socioeconomic impacts. The medium-medium economic scenario described in Chapter 3 was used to obtain the results presented in this chapter. This chapter begins with a summary of the electrical demand,the cost of power,and the environmental and socioeconomic impacts of the plans (Section 7.1).Next,the generic environmental and socioe;onomic impacts of the generation and conservation alternatives included in each plan are discussed,followed by the Railbelt-specific impacts of each plan.The reader may want to skip the generic discussion for each plan. 7.1 SUMMARY 7.1.1 Electrical Oemand The electrical demand for each of the electric energy plans over the time horizon of the study is shown in Figure 7.1.As the figure shows,the demand in all plans is very similar.Plan lA results in a peak demand of about 1260 MW in the year 2010.Plan IB includes the Susitna hydroelectric project. Because of the population and employment impacts of construction of this project,electricity demand is slightly higher in Plan IB than in Plan lA up to the year 1995.However,as will be discussed below,the Upper Susitna project results in a slightly higher cost of power in Plan IB than Plan lA between 1993 and 2005.This high cost reduces demand below that in Plan lA.After 2005 the lower cost of power in Plan IB results in a relatively higher demand. Plans 3 and 4 are less sheltered from fuel price escalation than any of the other plans since they include a limited amount of hydroelectric capacity. No significant difference exists in demand between these cases and Plan lA up to the year 2000;however,after that date the lower reliance on hydroelectric 7.1 1500 MW lOW 500 ~T1l5". 1260 lA 1250 ZB 11'0 ] 11804 1090 1110 2A 101 ~ •10110 9101020 1980 1985 1990 1995 2000 2005 2OlO FIGURE 7.1.Peak Electrical Demands for Medium-Medium Economic Scenario 7.2 power in these cases increases the cost of power above that in Plan 1A and reduces demand below the demand in Plan 1A. All plans include substantial electricity conservation due to the cost of power.However,in Plans 2A and 28 the demand for electricity is reduced still further by using a g~ant program to cover the investment costs of the four conservation alternatives specifically analyzed in this study (building conservation,passive solar space heating,active solar water heating,and wood stoves),plus miscellaneous commercial conservation.Including these conservation alternatives reduces the peak demand in these plans. 7.1.2 Cost of Power The annual costs of power for each of the electric energy plans are presented in Figure 7.2.As the figure shows,little difference exists in the costs of power among the various electric energy plans.The major differences in the costs of power are in the plans that include the Upper Susitna project (Plans 18 annd 28).A relatively rapid increase in the cost of power occurs in 1993 when the Watana Dam comes on line and another rapid increase in 2002 when the Devil Canyon Dam comes on line.However,the annual costs of power fall rapidly beyond 2002 and are significantly lower than any of the other plans by the year 2010.Plans lA,2A,3 and 4 all show the effects of the continued escalation of fossil fuel prices throughout the time horizon. As shown in Figure 7.2,choosing the plan with the lowest cost of power is difficult.For example,Plan 1A provides a lower cost of power than Plan 18 during the 1993-2003 time period,whereas Plan 18 has the lower cost of power from 2004 to 2010.It is unclear from the figure which plan provides the lowest cost of power over the entire time horizon of the study. To compare the costs of power for the various plans,the annual power costs should be expressed to more easily select the plan with the overall lowest cost of power.The concept of a levelized cost of power allows this to be done.The levelized cost of power is computed by estimating a single level annual payment,which would be equivalent to the present worth,given assumptions about the time value of money.The procedure used to levelize the cost of power is explained in Appendix B. 7.3 90 85 80 75 .c 70 ~ C!! V> :::l 65~ ""...~60C>. ~ l- V> 0 55u 50 45 40 _PlAN 2A r PlAN 4 ........_,'PlAN 3 I PlAN ]A --; '\ \\ \'\ \\PlAN 2B \ \PlAN 18 I , J ! /\!I .!I~.I'"-,''\;~;,; \...1 1980 1985 1990 1995 200l 2005 2010 FIGURE 7.2.Comparison of Annualized Cost of Powel"for Railbelt Electric Energy Plans 7.4 formal forecasts of power costs have not been made beyond 2010,this difference in power costs can be expected to increase over the service life of the Upper Susitna project.This difference is expected to be maintained because for generation the o~her plans are relatively more reliant on fossil fuel,which is expected to continue to escalate. To recognize this longer term behavior of power costs,the levelized costs of power were computed for twc different time horizons (1981-2010 and 1931- 2050)throughout the analysis.The shorter time horizon was picked to correspond to the time horizon of the study.However,since the study evaluates the Upper Susitna project,which has an economic lifetime of 50 years (and an even longer expected service lifetime),the longer time is also used to correspond to the economic lifetime of the project.The levelized costs of power for the 1981-2050 time period are computed assuming that no change will occur in the annual cost of power over the 2010-2050 time horllon.Whereas this assulT*,tion understates the relative advantages of the plans that include the Upper Susitna project,it does indicate advantages of these plans o~er the project lifetime.The levelized costs of power for the six plans over the two periods of analysis are p"esented in Table 7.1. TABLE 7.1.Levelized Costs of Power for Electric Energy Plans (mills/kWh) Period of Anal~sis 1981-2010 198r=->-2;?<0n'50' Plan 1A 58 64 Plan 1B 58 59 Plan 2A 59 66 Plan 2B 58 61 Plan 3 59 65 Plan 4 59 66 As shown in Table 7.1,essentially no difference exists in the levelized cost of power among the electric energy plans over the 1981-2010 time horizon. However,over the longer time horizon the plans including the Upper Susitn.! project provide the lowest cost of power. 7.5 7.1.3 Potential Environmental and Socioeconomic Impacts The environmental and socioeconomic ir.formation for each plan has been integrated to provide a qualitative evaluation,summarized in Table 7.2.The six plans are listed on the vertical axis of this table,and the various environmental and socioeconomic sectors are listed on the horizontal axis.The major concerns for each of these sectors are as follows: •air and water quality:Do pollutants that degrade these resources for other uses exist? •terrestrial,aquatic and marine ecology: the habitat and production of animal and Will any changes that reduce fish life occur? •noise,visual and odor:Do any attributes exist that may not be adverse to health but are bothersome? •health and safety:Do any effluents exist that may affect the health of workers and/or population? •jobs in Alaska:Does this technology provide new jobs? •boom/bust effects:Are new construction conmunities built and tI,en left afterwards with impacts on existing community structure? •land-use effects:To what extent will large areas of land be precluded for other uses by this technology? •susceptibility to inflation:To what extent is the power cost closely tied to the cost of fuels such as coal,oil and gas? •spending in Alaska:Will a major portion of the total cost of this project be spent in Alaska? Note that each case has been designated "+","-"or "N".The "+"indicates the il11'act of the change is desirable.The "-"indicates significant concern exists because the potential impact of the change is undesirable.The neutral "N"means that whereas some change may occur,it is not perceived to be particularly desirable or undesirable.The following sp.ctions further explain Table 7.2 by listing the strengths,weaknesses and uncertainties associated with each plan. 7.6 TABLE 7.2 Summa~y of Potential EnvironmentaJ &Socioeconomic Impacts of Railbelt Ener9Y Plan a Potential Environmental and Soctoecona.1c l!plcts Susceptl- Terres-Aquaticl Notse,Health Booml land-bllity Air Water trial Marine Vlsual and Jobs tn Bust Use to Spending Energy Plan Quallty aual1ty Ecology Ecology &Odo~Safety Alaska Effects Effects Inflatton In Alaska Plan lAo Base Case wt thout Upper SusHna -" " "-"•---"Plan 1B:Base Case With Upper Susitna •" " " •• • --"• Plan 2A:High Conservation & Use of Renew- ab 18 Resources. Without Upper Susltna """ " -• • --"•........Plan 2B:High Conser.atton & Use of Renew- Ib 1e Resources I With Upper Susltna •"""•••--•• Plan 3: Increased Use of Coal - -""-"" " --• Plan 4: Increased Use of Natural Gas • • ••••" "" (a)Key:•desirable -undesirable "neutral 7.1.4 Plan lA:Base Case Without Upper Susitna Strengths.Many jobs related to the construction of coal plants and the Chakachamna hydroelectric project could be available.No major problems are related to water quality ecology,health and safety,boom/bust effects or spending outside the state. Weaknesses.Significant potential impacts on air quality and land use and inflation effects due to fossil fuel use are possible.Potential exists for boom/bust impacts at the Bradley Lake and Chakachamna hydroelectric projects. Uncertainties.The development of the export coal mine at Beluga as assumed in this plan is not certain. 7.1.5 Plan IB:Base Case With Upper Susitna Strengths.Electric power needs are met without significant impacts to air quality,visibility,health and safety and other environmental sectors. New jobs are created and significant spending occurs within the state. Relatively good information is available on capital costs and environmental impacts.The plan is resistant to inflation once the project is constructed. Weaknesses.Significant boom/bust and land-use effects and high capital costs are associated with the construction of the Upper Susitna projects. Uncertainties.Impt'oper river flow control may be detrimental to fish production,especially salmon. 7.1.6 Plan 2A:High Conservation and Use of Renewable Resources,Without Upper Susitna Strengths.This plan has low health and safety impacts.This project will create jobs and stimulate significant spending within the state.No major problems are related to air quality,water quality,ecology,or inflation effects. Weaknesses.The main problems are associated with the local boom/bust effects of each project. Uncertainties.Health and safety impacts of indoor air pollution caused by conservation activities are unknown.The capital costs of alternative hydroelectric projects are uncertain.This plan assumes that a state conservation grant program is created. 7.8 7.1.7 Plan 2B:High Conservation and Use of Renewable Resources With Upper Susitna Strengths.This plan has high desirable results regarding air quality, noise,odor and vis~al effects,health and safety,new jobs,inflation effects, and spending in the state.No major concerns exist in the areas of water quality and ecology.Relatively good information exists on capital costs and environmental impacts,and power costs will be resistant to inflation ~nce the project is constructed. We knesses.Same as Plan :B;boom/bust and land-use impacts and high capital costs are associated with the construction and use of Upper Susitna projects. Uncertainties.This project assumes that an extensive state conservation grant program is created.Health and safety aspects of the indoor air quality of conservation activities are uncertain. 7.1.8 Plan 3:Increased Use of Coal Strengths.This plan requires considerable spending within the state.to construct coal-fired facilities.However,no major problems are associated with health and safety,ecology or boom/bust effects. Weaknesses.Significant ~otentia1 problems may occur in air quality, water quality,visual impacts,land-use and inflation effects.Constraints due to the Prevention of Significant Deterioration (PSD)program air-quality regulations are pos;ible.Incremental coal mining a~d reclamation activities due to coal use in Beluga and Nenana areas may be needed. Uncertainties.The development of the export coal mine at Beluga is a major uncertainty. 7.1.9 Plan 4:Increased Use of Natural Gas Strengths.The plan has highly desirable results for all sectors of the environment.No major problems are associated with jobs,boom/bust effects or land use. Weaknesses.Due to high technology of fuel cells and to a lesser extent gas combined-cycle units,a substantial amount of spending outside of the state will occur.In addition,inflation effects are significant because power costs are directly tied to the price of natural gas • .9 Uncertaintie~.Current gas reserves of natural gas in the Cook Inlet area are not expected to be adequate for expanded generation beyond 1990-1995. Additional reserves therefore will be required. 7.2 PLAN lA:BASE CASE WITHOUT UPPER SUSITNA As indicated earlier,the two variations of the base case are both based on a transition from existing generating technologies to alternative conventional generating technologies. The following are the primary generating alternatives included in this plan: •combustion turbines (gas or distillate) •combined-cycle (gas or distillate) •hydroelectric (other than Upper Susitna) •conventional coal steam-electric. The key features of this plan for the two load centers (Anchorage and vicinity and Fairbanks and vicinity)are summarized below: Anchorage and Vicinity •The Bradley Lake hydroelectric project comes on-line in 1968. •The Chakachamna hydroelectric project is built and comes on-line in 2002. •The Grant Lake project is built and comes on-line in 1995. •The Allison hydroelectric project is added and comes on-line in 1992. •Coal steam turbines and gas combined-cycles are installed as necessary to supplement the hydroelectric projects. Fairbanks and Vicinity •Oil combustion-turbine units are used for peaking until retirement. •Gas combined-cycles are added to prOVide peaking generation when existing oil combustion units are retired. •Coal steam-electric capacity is added for base load. 7.2.1 Capacity and Generation for Plan 1A In Plan 1A ~4oo MW of gas combined-cycle,400 HW of coal steam turbine, and 430 MW of hydroelectric capacity is added during the 1981 to 2010 time 7.10 span.Tao1e 7.3 shows the existing capacity in 1980 and the capacity additions (positive numbers)and retirements (negative numbers).Table 7.4 shows the amour,t of electricity generated by each of the generating alternatives during the 1981 to 2010 time period. As shown,during the 1981 to 1991 time period,electrical generation in Anchorage is largely supplied by gas combustion,turbine and combined-cycle with some hydroelectric generation.During the 1ate~20 years,generation in the Anchorage area is largely hydroelectric with some gas-combined cycle and coal steam turbine generation. In Fairbanks,coal steam turbine capacity is used for generation throughout the time horizon.Oil combustion turbine capacity is used during the first 10 years while some gas combined cycle capacity is used during the latter period. 7.2.2 Generation System Reliability The 10ss-of-1ead probability (LOLP)is an indication of the reliability of an electrical generatior.system.The LOLP indicates the probability that an electrical generating system will not be able to meet the electrical demand. The LOLP is expressed as the number of times a generation system will not be able to meet demand over a specified time period.For example,a LOLP of one day in 10 years indicates that the system would not meet load one time in 10 years.A LDLP of one day in 10 years is a relatively common design goal in the U.S. An indirect method of measuring system reliability is the reserve margin. The reserve margin indicates the amount of generating capacity an electrical generating system has in excess of the annual peak demand.Extra capacity is required to allow the system to meet the peak demand in the event of scheduled or unscheduled outages of certain generating units.A system with a peak demand of 1000 MW and a total generating capacity of 1200 MW would have a reserve margin of~.In general,a higher reserve margin indicates a greater amount of system reliability. The AREEP model adds capacity such that the reserve margin never drops below a selected value.The model then computes the resulting LOLP.Several model runs were made to insure that when analyses are done with AREEP,the reserve margin would yield a LOLP of about one day in 10 years.Different 7.11 TABLE 7.3.Existing Capacity (1980)and Capacity Additions and Retirements (1981-2010)-Plan 1A (MW) Anchor.g.-Cook Inl.t F.lrb.nks-T.n.n.V.ll.yon G.s G.s Co.l Co.ibu st I on Co.l G.s Conilust Ion Conillned-St....Turbine &St....Conilln.d- Year Turbin.Cycl.Turbin.Dl.s.1 Turbin..-mIL ______~dro.l.ctrlc 1980 461 139 0 266 69 0 46 (Eklutn.&Coop.r L.k.) 1981 0 0 0 0 0 0 12 (Solooon Gulch) 1982 -20 178 0 0 0 0 0 1983 0 0 0 -8 0 0 0 1984 0 0 0 0 0 0 0 1985 0 0 0 0 0 0 0 1986 0 0 0 -I 0 0 0 1987 0 0 0 -8 -4 0 0 1988 0 0 0 -6 0 0 90 (8radl.y Lak.) 1989 0 0 0 0 -5 0 0 1990 0 0 0 0 0 0 0 1991 0 0 0 -18 0 100 0....1992 -16 0 200 -19 0 0 7 (Allison)....1993 -9 0 0 0 0 0 0'"1994 -30 0 0 0 0 0 0 1995 -14 0 0 -33 0 0 7 (Grant Lak.) 1996 0 200 0 -102 0 0 0 1997 0 0 0 -65 200 0 0 1998 -50 0 0 0 0 0 0 1999 0 0 0 0 0 0 0 2000 -18 0 0 0 0 0 0 2001 0 0 0 0 0 0 0 2002 -51 0 0 0 -25 0 330 (Chakach ••.,a) 2003 -53 0 0 0 0 0 0 2004 0 0 0 0 0 0 o· 2005 -58 0 0 0 -21 0 0 2006 0 0 0 0 0 0 0 2007 0 0 0 0 0 0 0 2008 -26 0 0 0 0 0 0 2009 0 0 0 0 0 0 0 2010 0 0 0 0 0 100 0 TABLE 7.4.Electricity Demand and Generation by Type of Capacity -Plan lA (GWh) Anchoraqe-Cook Inlet Fairbanks-Tanana Valleyon Gas Gas Coal Combustion Coal Gas Combust ion Comblned-Steano Turbine &Steam Comblned- Year Turbine Cycle lurblne Diesel Turbine Cycle Hydroelectric 1981 2017 46 0 27 537 0 254 1982 765 1386 0 66 537 0 254 1983 839 1400 0 104 537 0 254 1984 941 1386 0 143 537 0 254 1985 409 2265 0 0 458 0 254 1986 1345 1465 0 27 537 0 254 1987 1440 1505 0 133 537 0 254 1988 1244 1445 0 238 537 0 648 1989 1355 1469 0 386 496 0 648 1990 998 2490 0 3 457 0 648 1991 1878 1655 0 1 496 51 648 1992 749 1429 1578 0 427 2 679 .....1993 856 1438 1584 0 436 3 679....1994 965 1428 1611 0 443 5 679 '"1995 91 2162 1611 0 496 197 710 1996 10 2444 1611 0 496 29 710 1997 1 995 1611 0 2013 3 710 1998 1 1024 1611 0 2019 4 710 1999 1 1057 1611 0 2020 4 710 2000 1 1085 1611 0 2026 4 710 z001 1 1159 1611 0 2034 5 710 2002 0 169 1611 0 1668 0 2155 z003 0 182 1611 0 1738 0 2155 z004 0 196 1611 0 1809 0 2155 z005 0 372 1611 0 1716 1 2155 z006 0 547 1611 0 1722 1 2155 z007 0 722 1611 0 1727 1 2155 2008 0 899 1611 0 1730 2 2155 z009 1 1059 1611 0 1732 20 2155 2010 0 1225 1611 0 1734 33 2155 electric energy plans and electtoical demands slightly change the reserve margin required to maintain a LOLP of about one day in 10 years.In most cases a °lanning reserve margin of between 24%to 32%yielded a LOLP of about one day in 10 years during most of the time horizon.There is little effect on the cost of power of alternative reserve margins within this range (EPRI 1978). For the results presented in this report,a planning reserve margin of 30%was used in all cases. 7.2.3 Environmental Considerations of Plan lA The hallmark of Plan lA is the increased use of fossil fuels (coal and gas)to produce electricity.The main environmental impacts are therefore associated with the combustion gases,waste products and cooling water required to operate the plants.In addition,the potential impacts of the 90-MW Bradley Lake and 330-MW Chakachamna hydroelectric facilities must be considered. This section discusses some of the general environmental concerns of Plan lAo Air Pollutants Several kinds of air pollutants are normally emitted by fuel-burning power plan~s.These include particulate matter,sulfur dioxide (S02)'nitrogen oxides,carbon monoxide,unburned hydrocarbons,water vapor,noise,and odors. Particulate matter consists of finely divided solid material in the air. Fuel combustion power plants produce particulate matter in the form of unburned carbon and noncombustible minerals.Particulate matter is emitted in large quantities if high-efficiency control equipment is not used.Particulates are removed from flue gas by electrostatic precipitators or fabric filters (baghouses).These precipitators of filters are routinely required,however, and collection efficiencies can be very high (in excess of 99%). Sulfur dioxide is a gaseous air pollutant that is emitted during combustion of fuels that contain sulfur.Sulfur dioxide,like particulate matter,has been identified as being harmful to human health,and it appears to be particularly serious when combined with high concentrations of particulate matter.It is damaging to many plant species,including several food crops such as beans. Nitrogen oxides (N0 2 and NO,primarily)are gaseous air pollutants that form as a result of high-temperature combustion or oxidation of fuel-bound nitrogen.Nitrogen oxides damage plants and play an important role in photochemical smog.Fuel combustion plants and automobiles are significant contributors to these emissions. 7.14 Pollution control technology for nitrogen oxides has developed more slowly than for most other air pollutants.Lack of chemical reactivity between NO x and conventional scrubbing compounds is the main difficulty.Thus,current control strategies focus on control of NO x production.Principal strategies include control of combustion temperatures (lower combustion temperatures retard formation of NO x)and control of combustion air supplies to minimize introduction of excess air (containing 78%nitrogen), Carbon monoxide (CO)emissions result from incomplete combustion of carbon- containing compounds.Generally,high CO emissions result from poor combustion conditions and can be reduced by using appropriate firing techniques.However, CO emissions can never be eliminated completely,even if the most modern combustion ~echniques and clean fuels are used.CO emissons are regulated under the Clean Air Act because of their toxic effect on humans and animals. Plumes of condensed water vapor come from wet cooling towers and combustion cases.When it is cold,the plumes are particularly long because the ambient air can hold little added mo.isture.Formation of these plumes is particularly hazardous during "fogging"conditions when a high wind speed causes the plume to travel along the ground.During freezing conditions,such plumes may lead to ice formation on nearby roads and structures.Dry cooling towers can be used to reduce fogging and icing. The S02 and NO x emissions from major fuel-burning facilities have been related to the occurrence of acid rainfall downwind of major industrial areas... Congress may soon enact laws to restrict these emissions because of the effects. of acid rain.The theoretical framework for explaining acid rain formation, the acidification of lakes,the effects on soils,vegetation,wildlife and structures,and the tracing of problems to specific source emissions is not yet fully understood.Much research is in progress,and recent research indicates that some remote areas of the western United States have been .affected by acid ra in. Emissions from Power Plants Combustion Turbines.One of the primary siting constraints of the combustion turbine technology is environmental.The exhaust from combustion turbines typically contains oxides of sulfur (Sax)as well as NO x 'These constituents comprise the main pollutants of greatest regulatory concern.CO, 7.15 unburned hydrocarbons,and particulate matter can also be present.The quantity of each particular contaminant emitted is a function of the size of the machine,the manufacturer,the type of fuel burned,and the extent to which emission control techniques are used.The sUitability of a particular site will depend upon the degree to which these contaminants can be controlled. Combined Cycle.Like the simple-cycle combustion turbine plant,a combined-cycle plant has siting constraints related to air emissions.In addition,the combined-cycle plant has further constraints imposed by the steam cycle,which requires water for condenser cooling and boiler make-up.However, because the combustion turbine portion of the total combined-cycle plant (approximately two thirds)requires essentially no cooling water,water requirements are much less than a similar sized,conventional steam-electric plant.Air-quality impacts are similar to those associated with combustion turbines. Coal-Fired Power Plants.Coal-fired power plants generate large quantities of solid waste derived from both the combustion process (fly ash and bottom ash)and from atmospheric emissions (flue-gas desulfurization wastes). These wastes require more ex<ensive environmental monitoring and waste characterization studies,and generally more sophisticated treatment technologies than other steam-cycle technologies.Water resource impacts associated with these solid wastes are generally mitigated through appropriate plant siting and a water,wastewater,and solid waste management program. The combustion of large amounts of coal leads to a potentially significant deterioration of the surrOUnding air quality.The major pollutants include particulate matter,sax and NO x 'Federal New Source Performance Standards govern these emissions. Other significant effects from coal-fired steam plants are associated with water supply and wastewater discharge requirements.Water withdrawal may result in impingement and entrainment of aquatic organisms.Chemical ano thermal discharges may produce acute or chronic effects to organisms living in the discharge plume area.Thermal discharges can also cause lethal thermal shock for some organisms in the rtailbelt region. Many potentially suitable development areas for coal-fired plants border important aquatic resource areas (salmon in streams like the Copper and Susitna Rivers and other marine fish and shellfish in Cook Inlet);plants located in 7.1~ these areas would have to be designed to mitigate effects on these resources. The greatest impact on the terrestrial biota is the loss or alteration of habitat due to the large amounts of land required for both construction and operation.These land requirements are generally greater than those for other types of fossil-fueled power plants. Other impacts to the terrestrial ecology could result from gaseous and particulate air emissions,fuel or waste storage discharges,human disturbance, and the power plant facilities themselves.Biological impacts are best mitigated Co,siting plants away from important wildlife areas and by implementing appropriate pollution control procedures.Although certain impacts can be controlled,land losses are irreplaceable. Air-Quality Regulations In 1970 the federal Clean Air Act established the national strategy in air pollution control.The Act established New Source Performance Standards (NSPS)for new stationary sources,inclUding fuel combustion facilities. Levels of acceptable ambient air quality (National Ambient Air Quality Standards)were also established,and the regulations were promulgated to maintain these standards or to reduce pollution levels where the standards were exceeded. New source performance standards (NSPS)have been promulgated for coa1- fired steam-electric power plants and for combustion turbines.In addition, any combustion facility designed to burn coal or coal mixtures is subject to the coal-fired power plant standards. Major changes were made to the Clean Air Act in 1977 when the Prevention of Significant Oeterioration (PSO)program was added by Congress.The PSD program has established limits of acceptable deterioration in existing ambient air quality S02 and total suspend particulates (TSP)throughout the United States.Pristine areas of national significance,called Class I areas,were set aside with very small increments in allowable deterioration.The remainder of the country was allowed a greater level of deterioration. The PSD program,currently administered by the U.S.Environmental Protection Agency (EPA),applies to S02 and suspended particulates.In the near future,PSD control over other -.jor pOllutants,inclUding NO x 'CO, 7.17 oxidants,3nd hydrocarbons may be promulgated. represents one of the largest single obstacles burning facility. Obtaining a PSD permit to constructing a major fuel- Water Quality Effects Hydroelectric Facilities.A hydroelectric facility can have several hydroelectric impacts because of its physical configuration and operation.The most obvious impact is the creation of an impoundment.The change from a flOWing-water to a still-water environment is a fundamental modification of the hydrologic system.Development of the reservoir also increases evaporation and groundwater seepage.Both of these phenomena increase water losses to the watershed.In the low-runoff regions of the Railbelt area,these losses,if substantial,could incur significant impacts by reducing downstream flow, especially during the summer months. Important hydrologic impacts are also associated with operating a hydroelectric plant.Large daily fluctuations in river flow can result when hydropower is used for peaking power or when it closely follows load.If the fluctuations are too large and rapid,adverse impacts to aquatic biota can occur,and for th~more accessible small river projects,th~y can be hazardous to downstream recreationists.On a seasonal time scale,the reservoir level can vary greatly,again having the potential for adverse impacts to aquatic biota and for making the reservoir unattractive for recreation (especially when the reservoir is low).The reservoir can be ope~ated to have positive imp,lctS by attenuating flood flows and thereby helping to prevent flood damage to property downstream.By augment i ng low river flows,the reservoir can impl·ove water quality and aquatic habitat.Because many rivers in the Railbelt region exhibit wide natural flow variations,attenuation can be a significant positive impact. Reservoir operation primarily impacts four parameters in terms of water quality:temperature,dissolved oxygen (DO),total dissolved gases,and suspended sed iment.Adverse impac ts from temperature and DO can occur during the summer months when the reservoir is stratified.The large water surface area of the reservoir allows the upper layer of water to be heated to temperatures higher than those experienced in the natural free-flowing river. If all water released from the reservoir is from the upper layer of water, elevated river-water temperatures downstream can'result,causing adverse 7.18 i~acts on aquatic biota (especially cold water fish).If all water released from the reservoir is from the lower layer of water,the DO in the river will be depressed until it can be replenished by natural reaeration.Intake s·tructures can be designed to take water from different levels in the reservoir to help avoid some of tI,ese i~acts. If the water released from the reservoir goes over the spillway,gas supersaturation sometimes occurs.Because of the turbulent nature of the water as it falls over the spillway,atmospheric gases (nitrogen and oxygen)are entrained.If these gases are carried to depth (e.g.,in a deep plunge pool), the gases are readily dissolved and the water becomes supersaturated relative to surface conditions.This situati~n can result in injury or mortality to aquatic organisms,particularly fish.The effects are most pronounced in organisms that inhabit shallow areas or surface levels.Supersaturation can be minimized by various spillway designs and operating measures. As water flows into a reservoir,its velocity is reduced,and it deposits much of its suspended sediment.Therefore,when the water is released from the reservoir,it is relatively free of sediment load.A potential exists,then, for this water to initiate scour downstream to re-establish equilibrium between the erosive energy of the flowing water and its sediment loads.Given that many of the Railbelt rivers are glacier-fed with very high suspended sediment loads,sediment deposition and downstream scouring will be i~ortant siting considerations.Scour can also occur near the outlet works and spillway of the hydropower plant if the water is discharged with a high velocity.The latter scour problem can be mitigated by proper engineering design. Hydroelectric projects alter the streamflow characteristics and water quality of streams.These changes result in corresponding changes in the aquatic biota.Although i~acts occur on all levels of the food chaon,the impacts on fish are usually of most concern.Potential major effects in the Railbelt that will be most difficult to mitigate include the following: 1.loss of spawning areas above and below the dam 2.loss of rearing habitat 3.reduced or limited upstream access to migrating fish 4.increased mortalities and altered timing of downstream migrating fish. Construction activities can result in elevated stream turbidity levels and gravel loss,and expanded public fishing in the area fnlll ·.ncreased access. 7.19 Other potentially significant impacts could include alter~nutrient movement, which could affect primary production;flow pattern changes,which can modify species composition;and temperature regime alteration,which could affect the timing of fish migration and spawning,and insect and fish emergence. Competition and predation between and within species may also be changed. Mitigative procedures are possible for many impacts and are frequently incorporated into the design of the facility.Fish hatcheries are commonly used to replace losses in spawning habitat.Screening or diversion structures are used to direct fish away from critical areas.Depending on the height of dam and the availability of spawning areas upstream of the created reservoir, fish ladders are frequently incorporated into the design.Controlled release of water (including both flow and temperature regulation by discharging from various depths in the reservoir)can be used to improve environmental conditions during spawning,rearing,and migration. Steam-Electric Plants.The construction and operation of steam-electric plants have three potential areas of impacts on aquatic ecosystems:water quality effects from construction stormwater runoff,water withdrawal for power plant use,and process water discharge.The degree of each potential impact Jepends on the plant's size,location,and operating characteristics. Construction area runoff can increase turbidity and siltation in recelvlng waters adjacent to site construction.For inland waters where steam-cycle facilities could potentially be sited,the main effect of this siltation could be the destruction of these productive aquatic ecosystems.Spawning areas could be eliminated by inundating g~avel with fine sediment particles that smother eggs or i,~abit fry emergence (especially for salmonids);benthic or~anisms could be smothered and light penetration reduced,thereby inhibiting the growth of aquatic plants.Salmon,trout,char,grayling,burbot,sheefish, and whitefish species,which are common in many of the major rivers of the Railbelt region,could be affected. The impact from construction runoff depends on the efficiency of erosion control measures and location of the site.Potential problems in both the fresh and marine waters can be minimized or eliminated by implementing appropriate site runoff and erosion control measures,such as runoff collection systems,settling ponds,and other runoff treatment facilities. Withdrawing water in significant amounts f~inland strea.s can alter flow patterns and reduce aquatic ha~itat downstre...These effects may be 7.20 partially offset by the amount of water discharged,if both the intake and discharge are on the same body of water.The loss of habitat is highly dependent on the size,type,and location of the steam plant. Attraction of organisms to thermal discharges may interfere with normal migration patterns.A particular concern is that marine organisms are attracted and become acclimated to a heated discharge from a once-through coolin~water system,which is then interrupted or stopped;the almost instantaneous temperature change back to ambient levels can result in thermal shock and subsequent mortalities to these organisms.Proper plant siting and cooling system design could reduce or eliminate thermal impacts.With other factors constant,the plant that uses the most water would have the greatest impact. The chemical composition of the intake water is altered during its passage through the steam plant.Changes in the composition generally depend on the specific steam cycle and its capacity,but chemical additions include the following: 1.chemicals,such as chlorine,added to control biological fouling and deposit of materials on cooling system components 2.constituents of the intake water concentrated during recirculation through evaporative cooling systems 3.corrosion products from structural components of the cooling system. Other potential pollutants from steam cycles include low pH,high metal concentrations,biochemical oxygen demand,radionuclides,and petroleum products.When discharged in sufficent quantity,these can cause immediate impacts such as death of organisms or long-term changes in the aquatic ecosystem.Of particular concern would be the effects on the commercial and recreationally important fish and shellfish species that reside in both the fresh and marine systems of the Railbelt region. Some effluents,like heavy metals and radionuclides,could have negative effects far from the site of their initial discharge,whereas others like low pH and biological oxygen demand (BOO)will have the most impact close to the discharge.Some of these effluents would have less impact on marine systems than on fresh water systems.Total dissolved solids (TOS)can be especially high in geothermal plants.High TOS would have little effect on the marine environment because TOS is already IIICh higher in seawater than in fresh 7.21 water.Low pH discharges would be more easily neutralized in the marine systems.Most other discharges could have negative effects on both fresh water and marine systems,but the marine environment's much larger area for dilution more easily reduces impacts. Ecological Effects Steam-electric and hydroelectric energy projects require large amounts of land.The amount of land required varies with the energy-producing capacity of a plant.Because hydroelectric plant requirements generally exceed those of other energy types,an important impact is the inundation of large areas of wildlife habitat. Impacts from hydroelectric energy projects result not only from inundation of land but also from the operation of the dam and the dam itself.Inundation of flood plains,marshes,and other important wildlife habitat can negatively affect big game animals,aquatic furbearers,waterfowl,shorebirds,and raptors.Big game animals can be impacted by loss of seasonal ranges and interruption of migratory routes.Winter ranges in particular are critical habitats for migratory big game ~~ima1s.The flood control provided by dams may significantly reduce the exte:.t of wetland habitats resulting from the eiimination of seasonal inundat~on of large areas downstream of dam sites. This factor may significantly Impact moose god other wetland species.Aquatic furbearers can be adversely affected by the loss of habitats.Correspondingly, waterfowl and shorebird nesting,loafing,and feeding areas can be eliminated by the flooding of these habitats.The re-estab1ishment of high-quality habitats is generally prevented by the constantly fluctuating water levels of plant operation.Fluctuating water levels can also destroy trees and other natural structures used by birds for perching,nesting,and roosting sites. Birds and bears can further be impacted·by the loss of fish if fish passage is prevented or reduced by the dam. Steam-e1ectric and hydroelectric projects located in remote areas cause other impacts.Access roads to remote locations cause extensive disturbance to wildlife.Not only will habitat be replaced by roads,but isolated wildlife populations will be adversely affected by increased human activity and numbers.These impacts could result in disturbance of wilderness species like grizzly bears.Also,other wildlife could be impacted from increased hunting pressure,poaching,and road kills.The magnitude of these and ~ther potential impacts will depend on the wildlife population densities at each specific site. 1.22 Mitigative measures could be taken to relieve some wildlife impacts resulting from dam developments.The habitats flooded by a reservoir would be largely irreplaceable.However,other habitats,such as islands used by waterfowl for nesting,could be created by placing spoils or channels in the affected area.Trees and other natural features used by raptors could be retained instead of removed as is usually done prior to inundation.Whereas these relief measures are somewhat specific,wildlife impacts,in general,can be minimiZed by selecting only those sites where wildlife disturbances would be the least. 7.2.4 Socioeconomic Considerations of Plan lA This section covers the general socioeconomic concerns of Plan lAo Combustion Turbines.Because of the relatively small workforce and acreage requirements for combustion turbine development,impacts can be expected to vary more with location than with plant scale.The absence of major siting constraints allows fleXibility in locating a combustion-turbine facili~y.Construction of a l70-MW plant would require 30 persons for a period of g months:To minimize impacts,combustion turbines should not be sited in very small towns,although installing a construction workcamp would lessen the demand for housing and public services.Primary plant sites would be Anchorage,Soldatna,and Fairbanks.Secondary sites would include Kenai, Seward,Wasilla,Palmer,and North Pole. Since a combustion turbine is a capital-intensive facility,20%of the project expenditures would be invested within the Railbelt,while 80%would be spent outside the region. Combined CYcle.Construction of a 200-MW combined-cycle plant requires 45 persons for a period of 2 years.The operating and maintenance requirements would be approx"imately 15 persons.Since the construction work force is relatively small,impacts should vary more with site location than with plant capacity.Severe construction-related impacts could occur in very small communities along the distribution pipeline or railroad where the infrastructure is insufficient to meet new demands.These impacts can be lessened by siting a combined-cycle plant in a community with a population graater than 500.Primary sites would include Anchorage,Fairbanks,and Soldatna.Secondary locations adjacent to the railroad or major highway corridor include Kenai,Seward,Wasilla,Palmer,and North Pole. 7.23 Since combined cycle is a capital-intensive technology,the largest portion of expenditures outside the region would be attributed to equipment. Approximately 70%of the project expenditures would be spent in the lower 48 states,while 30%would be spent within the Railbelt. Steam Electric.The construction and operation of a coal-fired plant has the potential to seriously affect smaller communities and cause a boom/bust cycle.These effects are due to the remoteness of prospective sites.The magnitude of these impacts is a function of plant scale.A major contributing factor to this relationship is the variation in size of the construction work force with plant size.Construction times,exclusive of licensing and permitting,will vary according to the size,type of equipment,and external factors such as weather and labor force.Construction schedules for coal-fired plants in the Railbelt will vary depending upon whether the boiler is field- erected.A 200-MW plant requires 3 to 5 years to construct. Impacts would be most severe at the Beluga coal fields since the surrounding communities are small and transportation facilities are poorly developed.Power plant components would most likely be shipped by barge and then transported overland to the site.Secondary impacts would b~caused by the construction of haul roads.Th~largest community in the area is Tyonek, an Alaskan native village with a population of 239.The influx of a construction work force would disrupt the social structure of a community of this size.The construction of a work camp would not substantially reduce these impacts. Impacts from developing a plant along the railroad corridor would de~end on a plant scale.Existing communities may be able to accommodate the requirements for constructing a 10-to 30-MW plant,but would be severely affected by a large-scale plant. The flow of capital expenditures both outside and within the Railbelt is expected to balance for a 200-MW coal-fired steam-electric plant.The flow of operating and maintenance expenditures is expected to be 10%spent outside the region and the balance spent in the region. Hydroelectric.The const"uction and operation of a large hydroelectric plant has a high potential to cause a boom/bust cycle,but a small-scale project will have a minor to moderate impact on community infrastructure.The primary reason large projects will create adver e effects is the remoteness of the sites.The sites are located at or near communities with I population of 7.24 less than 500.An in-migration of 250 to 1,000 workers,depending on the scale of plant in tile range of 100 to 1,000 MW,would be necessary for construction. In these remote communities,the population could more than quadruple.The installation of a construction camp would not reduce the impacts on the social and economic structure of a community. A small-scale hydro project may be compatible with remote communities. For example,a 2.5-MW project would require a construction workforce of 25. The length of construction time would be 2 years in comparison to 5 to 10 years for completion of a large-scale project. The expenditures that flow out of the region account for investment in equipment and supervisory personnel.For a large-scale project,a larger proportion of the expenditures is attributed to civil costs.ApprOXimately 35% of an investment in a large project would be made outside the region,whereas 65%would be made witllin the Railbelt.Sixty-five percent of the investment in a small-scale hydro project would be made in the lower 48 states,whereas 35% would be contained within the Railbelt.The breakdown of operating and maintenance expenditures for a hydroelectric project would be 11%spent outsiue the Railbelt and.89%spent within the region. 7.2.5 Integration of Potential Impacts The overall environmental and socioeconomic impacts of Plan 1A are presented in Table 7.5.The impacts mainly are minor to moderate.However, the following point~represent prominent concerns: 1.air-quality in~acts of coal-fired units 2.boom-bust impacts of coal and hydroelectric projects 3.water-quality and ecological impacts of construction and operation. Air-Quality Impacts of Coal-Fired Units The increased use of coal-fired steam turbines will require large amounts of land.The major facilities that will alter the landscape include smokestacks,cooling towers,coal stockpiles,the boiler plant,and the ash ponds.Of course,the smokestack and cooling tower plumes will be highly visible,especially in the winter months.The combustion emissions will 7.25 TABLE 7.5.Integration of Potential Environmental &Socioeconomic Impacts for Plan lA Potent tal EnvironMental and Soctoeconomlc IMPacts Suscept t- Energy Terres-Aquatlcl Hotse,Health Boom!land-bt11ty Spending Facilities Air Water trial Marine Visual and Jobs In Bust Use to In Alaska Added Quality Quality Ecologr Ecology &Odor Safety Alaska Effects Effects Inflat Ion IX Total) AnChoraye- Cook "'et Gas Turbine Contlustton 2 1 1 1 2 1 1 1 2 3 20 Comlned Cycle 2 2 2 2 2 1 2 2 3 3 30 Coal-Fired Steam Turbine 3 2 2 2 3 2 2 2 3 3 40 Fairbanks·....Tanana ValleY N Coal-Fired'"Steam Turbine 3 2 2 2 3 2 3 2 3 3 40 Gas Turbine Coonbust Ion 2 1 1 1 2 1 1 1 2 3 20 HYdroelectric Brad ley lake I 2 2 2 2 1 3 3 3 1 65 Chakachamna 1 2 2 2 2 1 3 3 3 I 6S Al11son 1 2 2 2 1 1 2 2 2 1 35 Grant lake 1 2 2 2 1 1 2 2 2 1 35 Rating Scale:1 -mtnor 2 -IIIOderate 3 -significant contribute to decreased visibility.Also,locating the fossil fuel power plants suc~that their plumes do not violate the PSD air quality regulations may be a problem. Two permanent Class I (Pristine Air)areas,Denali National Park and the pre-l980 areas of the Tuxedni Wildlife Refuge,are in or near the Railbelt region.The new National Parks and Wildlife Preserves have not been included in the original designation,but the state may designate additional Class I areas in the future.New major facilities located near Class I areas must not cause a violation of the PSD increment.This requirement presents a significant constraint to developing nearby facilities. A potentially important aspect of the PSD program to developing electric power generation in the Railbelt region is that Denali National Park (Mt. McKinley National Park prior to passage of the 19BD Alaska Lands Act)is Class I,and it lies close to Alaska's only operating coal mine and the existing coal- fired electric generating unit (25 HWe)at Healy.Although the PSD program does not affect existing units,an expanded coal-burning facility at Healy would have to comply with Class I PSD increment for S02 and suspended particulates.Because of this regulation,any coal plants in the Fairbank- Tanana Valley are assumed to be located in the Nenana area.Decisions to permit increased air pollution near Class I areas can only be made after careful evaluation of ~II the consequences of such a decision.Furthermore, Congress required that Class I areas must be protected from impairment of visibility resulting from man-made air pollution.Jhe impact of visibility requirements on Class I areas is not yet fully known. Based on information on emissions and regulations,several general conclusions can be drawn that bear on the siting of major fuel-burning facilities.First,these facilities should be located well away from Class I areas.A minimum distance would probably be 20 miles,but each case should be carefully analyzed to reliably choose a site.The forthcoming visibility regulations may require a greater distance.Also,because of regulatory constraints,any of these facilities should be located well away from the non- attainment areas surrOUnding Anchorage and Fairbanks.In addition,the major fuel-burning facilities should be located away from large hills and outside of narrow valleys or other topographically enclosed areas.Facilities should be 7.27 developed in open,well-ventilated sites in which atmospheric dispersion conditions will contribute to minimizing impacts on air quality. Many acceptable sites should exist for coal-fired power plants in the Beluga,Kenai,Susitna,and Nenana areas and near the available coa1 fields. Since Alaska coal is generally low in sulfur content,the siting constraints will be less stringent than those normally encountered in the eastern United States.Generally,emissions from natural gas combustion are of less significance,and the siting of such facilities is therefore less critical. For this study,the coal plants in Anchorage-Cook are assigned to be in Beluga and near Nenana in the Fairbanks-Tanana Valley. An initial assessment indicates that Alaskan lakes are not so sensitive to acid rain as lakes in eastern Canada and the northeastern United States. Furthermore,the total emissions into the Alaskan environment are much less than emissions from industrialized areas of the midwest and northeastern United States.In Alaska acid rainfall most likely never will present problems similar to those in the eastern portion of the continent.Currently no basis exists for assessing the impacts of acid rainfall that might develop because of increased fuel combustion in Alaska. Boom/Bust Impacts of Coal and Hydroelectric Projects The construction activities for the larger coal-fired steam-turbine units and the Bradley Lake and Chakachamna hydroelectric facilities will require substantial labor forces.For the more remote areas,the population could quadrupie.In these situations,installing a construction camp would not reduce the impacts on the social and economic structure of the community. Wacer-Quality and Ecological Impacts of Construction and Operation Both the coal-fired steam turbine units and the hydroelectric facilities will significantly alter water quality and the surrounding habitat for wildlife.For example,the configuration of the Chakachamna hydroelectric project will have some significant,irreversible impacts on the local water resources.Creation of the power tunnel,together with the concrete overflow structure,will greatly reduce flows in the Chakachatna River.In addition, the lake will be subject to significant fluctuations in elevation,perhaps as much as 180 feet.The McArthur River will experience an increase in flow, corresponding roughly to the loss in the Chakachatna River.Should the water qualities of the lake and McArthur River differ significantly.the river will 7.28 experience a change in water quality as well.Parameters most likely to experience a change include temperature,dissolved oxygen,total dissolved gases,and suspended sediment. During the design phase,actions can be taken to reduce the impacts on fish and wildlife.For example,a prime alternative for the Chakachatna project provides for flow from the lake into the Chakachamna River to maintain minimum flow requirements.This trade-off means a reduction in capacity from 400 MW to 330 MW and a 16S increase in the subsequent cost of power.But even with this increase,the cost of power is significantly less than the most competitive coal-fired power plant. Potential aquatic ecological impacts of hydropower project construction on Chakachamna lake center on lake ievel fluctuations as a result of reservoir drawdown (exposure of fish spawn and elimination of spawning habitat)and possible entrainment and impingement problems (fish eggs,larvae,and food organisms)associated with diversion of lakewater through the generators. Potential aquatic ecological impacts to the lake inlet streams may res~lt from decreased lake access due to reservoir drawdown during certain periods of the year. The primary inlet to the lake,the Chilligan River,serves as a spawning area for red (sockeye)salmon.Known spawning areas for Chinook (King)and pink (humpback)salmon exist in the lower tributaries of the Chakachatna (lake outlet)and McArthur Rivers.The McArthur River will receive the tailrace flows from the project.The annual adult escapement for these species is unknown,as is their contribution to the Cook Inlet runs.lake trout are resident within lake Chakachamna;Dolly Varden (Arctic char),whitefish,and rainbow trout are present in the lower tributaries of the Chakachatna and McArthur Rivers.Nonsalmonid fish species that probably are found within project area waters include sculpins,blackfish,and northern pike.Most likely all of the above species will be disturbed because of the pl·oject. Aquatic impacts on the Chakachatna and McArthur Rivers will be the most severe due to potential changes in existing flow regimes.For example,the design will essentially dewater the upper Chakachatna River and divert the lake outflow via a tunnel to the McArthur River.This scenario will most likely 7.29 elimin~te fish access to the upper Chakachatna River and Chakachamna Lake and will alter the existing flow regimes and chemical makeup of the McArthur River, thus potentially altering fish production in that river as well. The pr"mary potential wildlife impacts of hydroelectric development in the project area will be from river level fluctuations and habitat loss.River level fluctuation ~ay change the character of the riverine vegetation,which is used by moose in the winter,and marshes,which are used by waterfowl during the spring,summer,and fall.Changes in the river level may also affect the fish populations used by brown and black bear and habitat used by beaver. Unexpected drawdown will expose beaver-inhabited lodges to predation. The hydroelectric facilities and access roads will eliminate some wildlife habitat and open up the project area to increased hunting pressure.Whereas increased hunting is detrimental to some populations,it is beneficial to others and provides additional hunting opportunity to Alaskans.Increased access and the associated use by people will also create more poaching and human/bear conflicts.The Chakachamna project will impact wildlife in two river drainages.However,wildlife impacts resulting from alteration of Lake Chakachamna are expected to be small. 7.3 PLAN IB:BASE CASE WITH UPPER SUSITNA This plan is based upon a continuation of present generating technologies with a transition to Upper Susitna hydropower as required.Any additional capacity required is to be supplied by conventional coal-steam turbine or combined-cycle facilities.The key features for this plan for the two Load centers (Anchorage-Cook Inlet and Fairbanks-Tanana Valley)are summarized below: Anchorage-Cook Inlet I The Bradley Lake project comes on-line in 19B8. I The Upper Susitna project (both Watana and Devil Canyon)is available as early as 1993.The first stage of Watana (680 MW)comes on-line in 1993.Devil Canyon (600 MW)comes on-line in 2002. I If required by load growth,combustion turbine and combined capacity is added to fill in until Upper Susitna is available. 7.30 •If required by load growth,coal-steam turbine units are added after the Upper Susitna project is completed. Fairbanks-Tanana Valley •The Upper Susitna project (both Watana and Devil Canyon)is available as early as 1993.The first stage of Watana (680 MW)comes on-line in 1993.Devil Canyon (600 MW)comes on-line in 2002. •If necessary,combustion turbine and combined capacity is added to fill in until the Upper Susitna project is available. •If necessary,coal-steam turbine units are added after the Upper Susitna project is completed. 7.3.1 Capacity and Generation for Plan 1B As shown in Table 7.6,almost all the additional capacity added .~this plan is the first stage of Watana (680 MW)and Devil Canyon (6oo MW)dams of the Upper Susitna project.The Watana darn comes on-line in 1993 and the Devil Canyon dam comes on -1 i ne in 2002.Th~on 1y other capac ity added is 70 MW of gas combustion turbine capacity and 200 MW of gas combined-cycle capacity brought on line in 1990 and 1991,respectively,in the Anchorage area. As shown in Table 7.7,during the 1981-1992 time period,electrical generati~n in Anchorage is largely by gas combustion turbines and combined- cycle capacity,with some hydroelectric generation.In Fairbanks,oil combustion turbines and diesel capacity are used until 1990-91,whereas coal steam turbine continues to be used to a significant amount until 2002 when the Devil Canyon dam comes on line.From 2002 until 2010 the majority of electrical generation in the Rai1be1t is supplied by hydroelectric power, largely from the Upper Susitna project. 7.3.2 Environmental Considerations of Plan 1B The principle environmental considerations for this p1~n are associated with the development of the Upper Susitna River,with dams at Watana and Devil Canyon.In this section,descriptions of ambient bic10gica1 and vegetation conditions are presented. Fisheries.The Susitna Basin is inhabited by resident and anadromous fish.The anadromous group includes five species of Pacific salmon:sockeye 7.31 TABLE 7.6.Exi sti "9 Ca!lacity (1980)and Capacity Additi ons and Reti rements (MW)(1981-2010)-Plan IB Anchorage-Cook Inlet Fairbanks-Tanana Valleyon Gas Gas Combustion Coal Comustion Comined-Turbine &Steam Year Turbine Cycle Diesel Turbine Hydroelectric 1980 461 139 266 69 46 (Eklutna &Cooper Lake) 1981 0 0 0 0 12 (Solomon Gulch) 1982 -20 178 0 0 0 1983 0 0 -8 0 0 1984 0 0 0 0 0 1985 0 0 0 0 0 1986 0 0 -1 0 0 1987 0 0 -8 -4 0 1988 0 0 -6 0 90 (Bradley Lake) 1989 0 0 0 -5 0 1990 70 0 0 0 0 .....1991 0 200 -18 0 0 w 1992 -16 0 -19 0 0 N 1993 -9 0 0 0 680 (Watana) 1994 -30 0 0 0 0 1995 -14 0 -33 0 7 (Grant Lake) 1996 0 0 -102 0 0 1997 0 0 -65 0 0 1998 -so 0 0 0 0 1999 0 0 0 0 0 2000 -18 0 0 0 0 z001 0 0 0 0 0 z002 -51 0 0 -25 600 (Devil Canyon) z003 -53 0 0 0 0 z004 0 0 0 0 0 ZOOS -58 0 0 -21 0 z006 0 0 0 0 0 2007 0 0 0 0 0 z008 -26 0 0 0 0 z009 0 0 0 0 0 2010 0 0 0 0 0 TABLE 7.7.Electrical Generation by Type of Capacity -Plan IB (GWh) Anchorage-Cook Inlet Fairbanks-Tanana Valley 011 Gas Gas Combust ion Coal CoMlustion Combined Turbine &Steam Year Turbine CyC le Diesel Turbine Hydroelectric 1981 2021 46 26 537 254 1982 773 1389 64 537 254 1983 B51 1403 102 537 254 1984 958 1389 140 537 254 1985 425 2275 0 455 254 1986 1403 1482 20 537 254 1987 1528 1541 123 537 254 1988 1391 1470 226 537 648 1989 1529 1515 370 496 648 1990 1234 2494 2 468 648 1991 1945 1855 0 496 648....1992 1969 1928 1 496 648 '.->1993 1 1022 0 11 4103w1994211100194103 1995 0 733 0 496 4103 1996 0 688 0 496 4103 1997 0 643 0 496 4103 1998 0 597 0 496 4103 1999 0 553 0 496 4103 2000 0 508 0 496 4103 2001 0 626 0 496 4103 2002 0 0 0 0 5349 2003 0 0 0 23 5436 2004 0 0 0 0 5611 2005 0 0 0 0 5698 2006 0 0 0 1 5961 2007 0 0 0 5 6224 2008 0 0 0 9 6487 2009 0 0 0 14 6750 2010 0 0 0 18 7013 (red),coho (silver),chinook (king),pink (humpback),and chum (dog)salmon. Dolly Varden are also present in the lower Susitna Basin with both resident and anadroMOus populations.Anadromous smelt are known to run up the Susitna River as far as the Deshka River about 40 miles from Cook Inlet. Salmon are known to migrate up the Susitna River to spawn in tributary streams.Surveys to date indicate that salmon are unable to migrate through Devil Canyon into the Upper Susitna River Basin.To varying degrees spawning is also known to occur in freshwater sloughs and side channels.Principal resident fish in the basin include grayling,rainbow trout,lake trout, whitefish,sucker,sculpin,burbot and Dolly Varden. Because the Susitna is a glacially fed stream,the waters are silt laden during the summer months.This condition tends to restrict sport fishing to clear water tributaries and to areas in the Susitna near the mouth of these &i~tri~. In the Upper Susitna Basin grayling populations occur at the mouths and in the upper sections of clear water tributaries.Between Devil Canyon a~d the Oshetna Rivers most tributaries are too steep to support significant fish populations.Many terrace and upland lakes in the area support lake trout and grayling populations. Big Game.The project area is known to support species of caribou, moose,bear,wolves,wolverine and Dal1 sheep. The Ne1china caribou herd,which occupies a range of ~20,OOO square miles in southcentra1 Alaska,has been important to hunters because of its size and proximity to population centers.The herd has been studied continuously since 1948.The population declined from a high of ~71,OOO in 1962 to a low of uetween 6,500 and 8,100 animals in 1972.From October 1980 estimates,the Ne1china caribou herd contained ~18,500 animals. The proposed imooundments would inundate a very small portion of apparent low-quality caribou habitat.Concern has been expressed that the impoundments and associated development might serve as barriers to caribou movement, increase mortality,decrease use of nearby areas and tend to isolate subherds. Moose are distributed throughout the Upper Susitna Basin.Studies to date suggest that the areas to be inundated are used by moose pn,marily during the winter and spring.The loss of their habitat could rtduee the lOOse population for t~e area.The areas do not appear to be important for calving or breeding purposes;however,they do provide a winter range that could be critical during severe winters.In addition to direct losses,displaced moose could create a lower capacity for the animals in surrounding areas. Black and brown bear populations near the proposed reservoirs appear to be healthy and productive.Brown bears occur throughout the study area,whereas black bears appear largely confined to a finger of forested habitat along the Susitna River. The proposed impoundments are likely to have little impact on the availability of adequate brown bear den sites;however,the extent and utility of habitats used in the spring following emergence from the dens may be reduced.Approximately 70 brown bears inhabit the 3,5OO-square-mile study. Black bear distribution appears to be largely confined to or near the forests found near the Susitna River and the major tributaries.The forest habitat appears to be used the most in the early spring.In late summer black bears tend to ~ve into the more open shrub lands adjacent to the spruce forest because of the greater prevalerrce of berries in these areas. Five known and four to 'five suspected wolf packs have been identified in the Upper Susitna Basin.Project impacts on wolves could occur indirectly due to reduction in prey density,particularly moose.Temporary increases could occ~r in the project area due to displacement of prey from the impoundment areas.Direct inundation of den and rendezvous sites may decrease wolf densities.Potential increased hunting and trapping pressure could also increase wolf mortality. Wolverines are found throughout the study area,although they show a preference towards upland shrub habitats on southerly and westerly slopes. Potential impacts would relate to direct loss of habitat,construction disturbance and increased competition for prey. Oa11 sheep are known to occupy all portions of the Upper Susitna River Basin,which contains extensive areas of habitat above the 4,000 foot elevation.Three such areas near the project area include the Portage-Tusena Creek drainages,the Watana Creek Hills and Mount Watana.Since Oa11 sheep are usually found at elevations above 3,000 feet,impacts will likely be restricted to potential indirect disturbance from construction activities and access. 7.35 Furbearers.Furbearers in the Upper Susitna Basin include red fox, coyote,lynx,mink,pine marten,river otter,short-tailed weasel,least weasel,muskrat and beaver.Direct innundation,construction activities and access can be expected generally to have minimal impact on these species. Birds and Nongame Mammals.One hundred and fifteen species of birds were recorded in the study area during the 1980 field season.The most abundant species were Scaup and Common Redpoll.Ten active raptor/raven nests have been recorded and of these,two Bald Eagle nests and at least four Golden Eagle nests would De flooded by the proposed reservoirs,as would about three currently inactive raptor/raven nest sites.Preliminary observations indicate a low population of waterbirds on the lakes in the region;however,Trumpeter Swans nested on several lakes between the Oshetna and Tyone Rivers. Flooding would destroy a large percentage of the riparian cliff habitat and forest habitats upriver of Oevil Canyon dam.Raptors and ravens usjng the cliffs could be expected to find alternative nesting sites in the surr~unding mountains,and the forest inhabitants are relatively common breeders in forests in adjacent regions.Lesser amounts cf lowland meadows ar.d fluvial shorelines and alluvia,each important to a few species,will also be lost.None of the water bodies that appear to be important to waterfowl will be flooded,nor will the important prey species of the upland tundra areas be affected.Impacts of other types of habitat alteration will depend on the type of alteration. Potential impacts can be lessened by avoiding sensitive areas for construction sites. In the project area,thirteen small mammal specil~s were found during 1980, and the presence of three others was suspected.During the fall survey,red- backed voles and masked shrews were the most abundan';species trapped,and these,plus the dusky shrew,appeared to be habitat generalists,occupying a wide range of vegetation types.Meadow voles and pygmy shrews were least abundant and the most restricted in their habitat use;the former were found only in meadows and the latter in forests. Vegetation.The Susitna River drains parts of the Alaska Range on the north and parts of the Talkeetna Mountains on the south.Many areas along the east-west portion of the river,between the confluences of Portage Creek and the Oshetna River,are steep and covered with conifer,deciduous and miXed 7.36 conifer,and deciduous forests.F1~t benches occur at the tops of these banks and usually contain low shrub or woodland conifer communities.Low mountains rise from these benches and contain sedge-grass tundra and mat and cushion tundra. The Devil Canyon and Watana reservoirs will inundate a total of 44,729 acres of vegetation.The access road or railroad will destroy an additional 371 to 741 acres of vegetation,which is roughly equal to 0.02%of the vegetation in the entire basin.The primary vegetation types to be affected are mat and cushion tundra,sedge-grass tundra,birch shrubland and woodland spruce. Land Use.EXisting land use in the Susitna area is characterized by broad expanses of open wilderness areas.Those areas where development has occurred often include small clusters of several cabins or other residences. Many single-cabin settlements are located th~oughout the basin.Most of the eXisting structures are related to historical development of the area, initially involving hunting,mining,and trapping and later guiding activities associated with hunting and to a lesser extent fishing.Today a few lodges can be found,mostly used by hunters and other recreationa1ists.Many lakes in the area also included small clusters of private year-round or recreational cabins. Perhaps the most significant use activity for the past 40 years has been the study of the Susitna River for potential hydro development.Hunting, boating,and other forms of recreation are also important uses.Numerous trails throughout the basin are used by dog sled,snowmobile and all-terrain vehicles.Air use is significant for many lakes,providing landing areas for planes on floats. 7.3.3 Socioeconomic Considerations of Plan 18 The construction and operation of the Watana and Devil Canyon dams have the potential for both positive and adverse socioeconomic effects.The positive effects will be employment opportunities and revenues that will be generated by the project and which will stimulate growth of the local economy in the short term and,in the long term,will contribute to the expansion of the regional economy.The adverse effect is the in-migration of temporary workers to a community,potentially in9 a boom/bust cycle. The primary effect of a boom/bust cycle is a temporarily expanded population with insufficient infrastructure to support the new demands.The in- migration of workers to a community will have an impact on land availability, housing suppiy,commercial establishments,electric energy availability,roads, public services such as schools,hospitals,and police force,and public facilities such as water supply and domestic waste treatment facilities.The magnitude of these impacts will depend on the population of the area,the size of the construction work force,and the duration of the construction period. The bust occurs with the out-migration of a large construction work force, which leaves the community with abandoned housing and facilities. The magnitude of the boom/bust cycle is determined by the duration of the construction and the relative size of the work force to the community.A construction force of a thousand or more workers will be required for a period of 5 to 10 years for th~Upper Susitna project.Yet,as revealed by the 1981 Census,only 18,000 people or 6%of the State's population lives in the Matanuska-Susitna Burough where the project is located.This area is alr~ady experiencing rapid growth because its southern part is influenced by the Anchorage labor market.The 1970 population of the Matanuska-Susitna Burou9h was 6,500.Smaller cities along the Railbelt,especially Talkeetna,would be directly impacted by the Upper Susitna project,whereas Fairbanks and Anchorage would be less affected due to their size and distance from the project area. While much of the work force may be drawn from the Fairbanks and Anchorage labor market areas,they most likely will not be commuting the distance involved.Installing a ~onstruction camp would not substantially reduce the social and economic impacts in the community. The secondary effect of the construction may be the growth of the local and regional econo~ies.The increase in the number of permanent residents will cause the introduction of new businesses and jobs to the community.This effect may be perceived as either positive or negative,'depending on individual points of view.The expenditures on capital and labor during both the construction and operation phases will increase regional income as well as local income.Increased regional income would be caused by the expansion of construction firms and related industries.A parameter of expansion of the regional econo~is flow of expenditures within the region and can be measured in terms of percentage. The expenditures that flow out of the region account for investment in equipment and supervisory personnel.For a large-scale project,such as the Upper Susitna,a larger proportion of the expenditures is attributed to civil costs.Approximately 35%of an investment in a large project would be made outside the region,while 65%would be made within the Railbelt.The breakdown of operating and maintenance expenditures for the project would be ~ll%spent outside the Railbelt and ~9%spent within the region. 7.3.4 Integration of Potential Environmental and Socioeconomic Impacts for Plan lB The integration of potential environmental and socioeconomic impacts are presented in Table 7.B.The impacts are directly related to nature of this plan;that is,future demands for electricity are largely met by developing the Uppe~Susitna project,and thereby precluding the use of other alternatives such as coal-fired steam-turbine power plants.In this plan,concerns related to air pollution are almost nonexistent because all eXisting oil combustion turbines,diesels and coal steam turbine units in Fairbanks are phased out.In Anchorage,a substantial amount of the existing gas combustion turbine capacity is phased out and only 70 MW of new capacity is added;however,about 400 MW of gas combined cycle capacity is added.Even with this,in 2010 the amount of electricity derived from fossil-fuel resources would be less than it is today. The principle integrated impacts of this plan are,therefore,related to the construction and operation of Bradley Lake,Watana and Oevil Canyon hydroelectric projects.Therefore,the main concerns are 1)changes in water quality and subsequent impact on fisheries,2)loss of habitat area for animals,and 3)the boom/bust impacts of construction. 7.4 PLAN 2A:HIGH CONSERVATION ANO USE OF RENEWABLE RESOURCES WITHOUT UPPER SUSITNA Plan 2A emphasizes thl!use of conservation to reduce electrical energy demand,as well as the use of renewable energy sources such as refuse-derived fuel and wind.Increasing levels of conservation are included for each load center and they are assumed to be encouraged through state grant programs. Under this plan,conservation and alternatives ,'elying on renewable resources,excluding the Upper Susitna project,will be developed to the maximum extent feasible.Additional capacity required will be provided by conventional generating alternatives as in Plan lAo Additional features' specific to each load center are presented below: 7.39 TABLE 7.B.Integration of Potential Environmental·&Socioeconomic Impacts for Plan IB Potentl.1 En.lr....nt.l .nd Socloecon..Ic lop.cts susceptt- E..r~Terres-Aqu.tlcl Notse,Health BOOM!L.nd-btllty Spending F.cl Itles Air Water tr1l1 Marine Vlsual .nd Jobs In Bust Use to In Al.ska Added Ou.l1ty quality Ecology Ecology 'Odor .Safety Alask.Effects Effects Inflation IX Totol) AnChora~ Cook n et Gas Turbine Cod>ustlon 2 I I I 2 I I I I 3 20 Gas Cod>lned Cycle 2 I 2 2 2 I 2 I 2 3 30 Hvdroe lectr1c Grant lake I 2 2 2 I I 2 2 2 I 35 .....Br.dley L.ke I 2 2 2 I I 3 3 3 I 65... 0 I 2 2 2 I I 3 3 3 I 65Watana 00.tl C.nyon I 2 2 2 I I 3 3 3 I 65 R.tlng Scale:I -.1oor Z .lMMIerate 3 -slgnlflc.nt Anchorage-Cook Inlet •The Bradley Lake project comes on-line in 1988. •The Allison project comes on-line in 1991. •The Chakachamna and Grand Lake projects are built and on-line in 1995. •The Keetna hydroelectric project comes on-line in 2008. • A SO-MW refuse-derived fuel plant is added in 1993. •Addition generation is supplied by natural gas combined-cycle and combustion turbine. • A state grant program to encourage the installation of conservation alternatives (passive solar space heating,active solar water heating, wood space heating,and building conservation)exists for 1981 onward. Fairbanks-Tanana Valley •The Browne hydroelectric project comes on-line in 1995. • A 100 MW of large wind turbine generation is added in the Isabell Pass area. • A 2O-MW refuse-derived fuel plant is added in 1994. • A state grant program to encourage the installation of conservation alternatives exists. 7.4.1 Capacity and Generation for Plan 2A As shown in Table 7.9,this plan is highly reliant on hydroelectric and other renewable generating r~sources.The amount of reduction in the peak load due to a conservation grant program is shown in the last column.As shown,the reduction varies between 40 MW and 60 MW,depending upon the year. The electrical production "for each of the generating capacities in the plan is shown in Table 7.10. 7.4.2 Environmental Considerations of Plan 2A Technologies used in this plan and not included in earlier plans are refuse fuel ana wind turbine generators.In addition,Allison,Brown and Snow and hydroelectric projects are used,as well as several energy conservation methods. 7.41 TABLE 7.9.Existing Capacity (1980)and Capacity Additions and Retirements (1981-2010)-Plan 2A (MW) Anchorage-Cook Inlet Fairbanks-Tanln.Villey uti GIS GIS R.fule·CoIlbu s t Ion Cu.I Refuse-Toll I CoIlbu 5l t on C....tnod-Dlrtwed Tu,.btne &S....Wind Turbine Der;ved Total Conser- !!~Turbine Crele Fuel ylnel Turbine Generltors f!!!L-Hydroelectric lli.!2!L 1!l8O 461 139 0 266 69 0 0 46 (Eklutn,,0 _Cooper Lake) 1981 0 0 0 0 0 0 0 12 (Sol ....Gulch)IJ 1982 -20 118 0 0 0 0 0 0 26 1983 0 0 0 -8 0 0 0 0 3Y 1984 0 0 0 0 0 0 0 0 52 1985 0 0 0 0 0 0 0 0 65 1986 0 0 0 -1 0 0 0 0 67 1907 0 0 0 -8 -4 0 0 0 69 1988 0 0 0 -6 0 0 0 90 (Bradley lake)71 1989 0 0 0 0 -5 0 0 0 7) 1990 0 0 0 0 0 0 0 0 75 1991 0 0 0 -18 0 0 0 7 (Allison)60 1992 -16 0 0 -19 0 25 0 0 62 993 -9 0 SO 0 0 25 0 0 56 1994 -30 0 0 0 0 SO 20 0 49 1995 -14 0 0 -33 0 0 0 337 (Grant lake"43....Chahcha.t.)...1996 0 0 0 -102 0 75 20 0 43 '"1997 0 200 0 -65 0 0 0 0 44 1998 -SO 0 0 0 0 0 0 0 44 1999 0 0 0 0 0 0 0 0 45 ZOOO -18 0 0 0 0 0 0 0 45 z001 0 0 0 0 0 0 0 0 47 2002 -51 0 0 0 -25 0 0 0 48 2003 -53 0 0 0 0 0 0 0 50 ZOO4 0 0 0 0 0 0 0 0 51 2005 -58 0 0 0 -21 0 0 80 (Brown)53 ZOO6 70 0 0 0 0 0 0 0 55 2007 0 0 0 0 0 0 0 0 57 ZOO8 0 0 0 0 0 0 0 100 (keet••)54 2009 70 0 0 0 0 0 0 0 61 2010 0 0 0 0 0 0 0 0 63 TABLE 7.10.Electrical Generation by Type of Capacity -Plan 2A (GWh) Anchorage-Coot Inlet Falrbanks·Tan.".Valley 011 G...Gas Refuse~COllIbust1on Co.l Refuse-Toul COIlbust Ion Coobtned·Oe,.t ...ed Turbtt ..,SteM W1n<t·Turbtne Dlrhed Total Conser- ill!:Tu1U!!L-CYCle Fuel !!tesel .~Genefltors Fu'!L.HYdroelectric valton 1981 1936 35 0 14 531 0 0 254 71 1982 636 1364 0 39 531 0 0 254 155 1983 652 1359 0 65 531 0 0 254 lJJ 1984 613 1351 0 90 531 0 0 254 JlO 1985 195 2101 0 0 393 0 0 254 318 1986 995 1406 0 0 504 0 0 254 401 1981 1090 1411 0 18 531 0 0 254 414 1988 OZ4 1394 0 189 531 0 0 648 4Z1 1989 918 1405 0 342 496 0 0 648 440 1990 495 Z466 0 0 416 0 0 648 453 1991 1532 1489 0 0 496 0 0 671 415 1992 1594 1509 0 I 496 0 0 671 311 1993 1360 1441 394 0 481 85 0 611 339 1994 1216 1436 394 0 416 111 150 611 302 1905 9 1311 394 0 496 342 158 2153 264 1996 8 1311 394 0 492 342 158 2153 268 1901 I 1313 394 0 496 342 158 2153 2n ....1998 I 1301 394 0 496 342 158 2153 Zl5 1999 I 1300 394 0 496 342 158 2153 Zl9 .1>ZOllO 1 1294 394 0 496 342 158 2153 28Jwz0011131639404963421582153292 z002 2 1662 394 0 289 342 158 2153 300 z003 2 1143 394 0 289 342 158 2153 309 2004 3 1823 394 0 289 342 158 2153 311 ZOOS 2 1685 394 0 124 342 158 2539 325 ZOO6 3 1823 394 0 124 342 158 2539 338 z001 4 1960 394 0 124 342 158 2539 350 2008 3 1116 394 0 124 342 158 2863 363 1009 4 1913 394 0 124 342 158 2863 315 2010 5 2051 394 0 124 342 158 2863 381 Refuse Fuel Refuse-fuel plants are distinct from fossil fuel-fired units in that maximum plant capacities are achieved at much lower power ratings in refuse- fuel plants.Also,refuse-fuel plants have specialized fuel handling requilrements.The generally accepted limits for refuse-fired power plants are ~5 to 60 MW.The moisture content of the fuel,as well as the scale of operation,introduces thermal inefficiencies into the power plant system.In both Anchorage's and Fairbanks'refuse-derived fuel plants,supplemental firing with coal is required to co""ensate for seasonal fluctuations in refuse ava ilabil i ty. Siting and Fuel ReqUirements.Siting requirements are dictated by the condition of the fuel,location of the fuel source,and the cycle employed. Because the fuel is high in moisture content and low in bulk density, economical transport distances do not exceed 50 miles.The power plants are thus typically sited at,or near the fuel source.Sites must be accessib'e to all-weather highway.s since biom~ss fuels are usually transported by truck. Approximately 4 trucks per hour would be required for a 50-MW plant. While proximity to the fuel source may be considered most limiting,sites also must be accessible to water for process and cooling purposes.I.and area requirements are a function of scale,extent of fuel storage,and other de-sign parameters.A 50-MW plant would require 50 acres of land.This large area is needed to accommodate.fuel-receiving facilities,fuel-storage piles,materials handling and preparation systems,boilers,feedwater treatment systems,turbine generators,and associated pollution control systems for such activities as stack gas cleaning and ash disposal.Also,because of the refuse,substantial buffer zones may be required. Power Plant Characteristics and Emissions.The core of the power p1arlt is the boiler and the turbine generator.'Howevel',like the coal-fired powe-r plant,ancillary systems exist for fuel receiving,storage and processing,for stack gas cleanup,bottom and fly ash handling and condenser cooling purposes. Fuel processing equipment is particularly critical if spreader··stocker firing is used.Metallic and other noncombustible objects must be removed from the fuel.Preferably,municipal waste will be shredded and c1jssified to minimize 7.44 contamination by metals and glass objects.Combustion with minimal fuel preparation,while practical in some cases,results in less efficient operation of the equipment. Potentially significant impacts from refuse plants are similar to other steam-cycle plants and result from 1)the water withdrawal and effluent discharge,2)atmospheric emissions of particulate matter,NO x 'SOx and others,3)disposal of solid waste and ash,and 4)ecological effects. The major impact affecting the terrestrial biota and resulting from refuse- fired power plants is the loss or modification of habitat.land requirements for refuse-fired plants are similar to those of coal-fired plants and are generally greater than those for other steam-cycle power plants on an acres- per-MW basis.The primary locations of refuse-fired power plants in the Railbelt region are adjacent to lands that contain seasonal ranges of moose, waterfowl and other animals.Impacts on these animal populations will depend on the characteristics of the specific site and the densities of the wildlife populations in the site area.Because of the relatively small plant capacities involved,however,impacts should be minimized through the plant siting process. Wind Energy Until the mid-1930s wind energy supplied a significant amount of energy to rural areas.With the advent of the Rural Electrification Administration and the abundance of oil and coal,wind energy ceased to be competitive with other power alternatives.Renewed interest in the development of wind resources has occurred,however,as fuel costs have risen and have increased the cost of power from competing technologies. This alternative consists of large wind energy conversion systems (wind turbines)configured as a wind farm,located in the Isabell Pass wind resource area.The wind farm consists of ten 2.5-MW horizontal axis wind turbines,for a total 25-MW rated capacity. Wind turbine generators located at Isabell Pass would have small impacts on the atmospheric or meteorological conditions around the site.The impacts relate to small microclimatic changes and interference with electromagnetic wave transmission through the atmosphere.No effects on air quality are generated. 7.45 Wind turbines extract energy from the atmosphere and,therefore,have the potential of causing slight modifications to the surrounding climate.Wind speeds will be slightly reduced at surface levels and to a distance equivalent to 5 rotor diameters,which would be ~1500 feet for a single 2.5-MW facility. Small modifications in precipitation patterns may be expected,but total rainfall over a wide area will not be impacted.Nearby temperatures, evaporation,snowfall,and snow drift patterns will be affected only slightly. The microclimatic impacts will be qualitatively similar to those noted around large isolated trees or tall structures. The rotation of the turbine blades may interfere with television,radio, and microwave transmission.Interference has been noted within 0.6 miles (1 km)of relatively small wind turbines.The nature of the interference depends on signal frequencies,blade rotation rate,number of blades,and wind turbine design.A judicious siting strategy could help to avoid these impacts if they seem to be a problem. Stream siltation effects from site and road construction are the only potential impacts associated with wind-energy technology since process water is not required.Silt in streams may adversely affect feeding and spawning of fish,particularly salmonids,which are common in the Railbelt region.These potential problems can be avoided by proper construction techniques and should not be significant unless extremely large wind farms are developed. Wind-powered energy requires varying amounts of land area for development.The area required will depend on the number,spacing,and type of wind-powered unit.This requirement can range from ~2 acres for a 2.5-MW generating unit to 100 square miles for numerous units generating up to 1000 MW.Because of operational requirements for persistent high-velocity winds, these developments may be established in remote areas. Because of the land requiremen::involved and the potentially remote siting locations,the greatest impact resulting from wind-energy projects on terrestrial biota would be loss or disturbance of habitat.Wind-generating structures can furthermore impact migratory birds by increasing the risk of collision-related injury or death.Other potential impacts include low- frequency noise emanating from the generators and modification of local 7.46 atmospheric conditions from air the turbulence created by the rotating blades. The impacts of these latter disturbances on wildlife,however,are presently unclear. Hydroel~ctric The environmental considerations associated with hydroelectric projects such as Allison,Brown,Keetna,Grant Lake,Snow,Bradley Lake and Chakachamna are all similar and previously described in Section 7.2.3. Conservation In this plan,the State of Alaska is assumed to provide grants to those homeowners who wish to implement high-cost conservation techniques.In the absence of a subsidy program,a substantial amount of electrical conservation would exist because of increases in electricity and fossil fuel prices. Through grants to homeowners Plan 2A increases this situation by "investing" in additional conservation that reduces the consumer's investment cost (but not his operating and maintenance costs)to zero for selected high-investment homeowner energy-saving technologies.At the prices of power projected in these supply plans,consumers are assumed to undertake on their own such low- investment,high-payoff strategies as set-back thermostats,water heater blankets,storm windows,weatherstripping,etc.The specific techniques for which grants are assumed to be available are superinsulation,passive solar heating,active solar hot water heating and wood-fired space heating.The subsidies bring the housing stock electric-use efficiency up to technical and market limits imposed by sit'ng considerations,operating costs,and consumer conven i ence. The limits on market penetration of the four residential high-inv~stment technologies are assumed to be affected in the following way.For superinsulation,the price-induced market penetration is substantial -50%of the total housing stock (and a much higher percentage of new homes).The payback per)od is already very short for conservation and is only slightly reduced by grant programs.Market penetration is increased to 55%by subsidies.Passive solar is restricted in the existing housing stock by siting and architectual considerations,and in the new housing stock by building sites.However,the long payback period in the nonsubsidized case implies that a state grant program would increase market penetration from about zero to u~ to 33%of the whole housing market (more in new houses).Active solar hot water heating has v~ry long paybacks,but siting and technical considerations 7.47 are expected to restrict the market penetration to ~10%of all households. Wood stoves are already very popular as supplemental heat.Payback periods are quite long;however,if the wood fuel must be purchased at ~80 to ~90 a cord, this will be a fair market test of the technology.8ecause fuel costs are imp rtant,a grants program is expected to have little incremental impact on use of wood stoves as primary heating units.An estimated equivalent of 20%of all households would heat exclusively with wood,but none would do this because of the subsidy. Little is known about commercial electrical uses in the Rai1be1t.8ased on investment and engineering calculations contained in the Oak Ridge National Laboratories'commercial energy model (DOE 1979),commercial electrical use was estimated to be reduced in the commercial sector by ~5%on the average.In the absence of subsidies,~69%penetration is assumed.With grants,this is increased to 100%penetration,and 35%full technical savings are achieved. Table 7.11 shows the estimated number ~f homes using these techniques in the year 2010. TABLE 7.11 Estimated Number of Homes Using the Conservation Techniques Super Passive Solar Active Hot Insulation Space Heating Water Heat Anchorage 8,384 54,498 16,769 Fairbanks 1,975 12,B35 3,949 Glennallen/Valdez 368 2,389 735 Superinsu1ation.This ~nc1udes several measures such as specialized construction techniques for floor and foundations systems,wall systems,roof systems,windows and doors,plus movable insulation such as shudders and a wide range of measures to reduce air infiltration.Caulking and weatherstripping plus air-to-air heat exchangers are features commonly included.All of thes~ measures reduce to the direct loss of thermal energy from the home. Passive Solar Space Heating.In the purest sense,passive solar uses no mechanical means such as fans or pumps to distribute heat from the sun into the liVing space.It relies on a combination of a thermally efficient bUilding envelope to contain heat,south glaZing to capture solar energy,some form of 7.48 thermal mass to sto~e this energy for release at night or during periods,and design techniques to distribute heat by convection. the building is tl1le system. cloudy Essentially, Environmenta,l impacts from passive solar technologies are minimal,almost nonexistent.No traceable air or water pollution has been recorded in dispersed applicntion.For the environment solar is almost ideally benign fuel source. The potenti'al detriments of solar on the environment center on two factors:aesthetics and reflected glare.Aesthetic appeal is,of course, subjective,and not quantifiable.It is,however,an important factor.Since the concept of passive solar centers on the building and its components,the designers must ensure an aesthetically pleasing structure.Many examples of passive solar buildings throughout the United States are considered "ugly"by their critics.On the other hand,just as many or more examples of successful installations can be found.Entire solar subdivisions such as those in the city of DaVis,California,are both pleasing to look at and pleasant to live in.Passive solar housing does not have to look different from the more "traditional"buildings,except for the expanse of south-facing glass. Reflected glare off south glaZing is a potential problem in s~lar application.The extent of the problem in the Railbelt is not know~at this point.Glare is more prevalent when the sun strikes the glaZing at an acute angle;i.e.,the less perpendicular the sun's rays to the collector surface, the more glare encountered.During the Winter,vertical glass will not cause excessive glare problems.In the summer proper design of the roof overhangs will ensure that enough glass is shaded to alleviate most glare.During the spring and fall the phenomenon could cause problems to passing motorists and pedestrians.The small number of solar system installations in the Railbelt region precludes answers to these potential problems at this time. Consumer safety poses no real problem with passive solar.Because most systems are simple and benign,danger to the consumer is far less than a central fuel-fired furnace system,for example.Workers certainly face higher percentage of danger when installing systems,but potential injury and death is limited to those risks that the worker might encounter in standard construction. Active Solar Water Heating."Active"solar systems require auxiliary pumping energy to function properly.These systems differ from "passive"solar 7.49 energy application,which requires very little or no auxiliary energy.Active solar energy use is an accepted technology;thousands of systems have been installed throughout the United States. Three varieties of dispersed active solar systems are currently available for use in Alaska:liquid-based flat-plate collector systems for space heating,liquid-based flat-plate collector systems for hot water heating,and hot-air systems for space heating. The high cost of initial investment seems to preclude solar energy use for space heating but for heating water it is feasible in the Railbelt.On an annual average,~50%of the hot witer needs can be met by active solar collectors. 7.4.3 Socioeconomic Considerations for Plan 2A The socioeconomic considerations for this plan stem from a wiJe range of 3~tivities,including construction of fossil power plants,use of refuse as a fuel,wind energy,hydroelectric facilities anc energy cons~rvation techniques which include insulation,passive solar heating,and active solar hot water heating. Refuse Fuel Impacts of refuse-fired plants will vary among the primary locations iden~ified,as well as with scale.For Anchorage SO-MW and for Fairbanks 20-MW plants can be constructed with minimal impacts to the social and economic structure of those communities.The construction staff of 65 could come from the regional labor force,reducing or eliminating ~he need to transfer workers from other areas of the Railbelt to these sites. The breakdown of capital expen~jtures is expected to be 60%outside the Railbelt and 40%within the region.Expenditures due to a large capital investment will be offset by an Alaskan labor force.Approximately 10%of the operating and maintenance expenditures would be spent outside the Railbelt region. Wind Systems A wind turbine requires a small construction work force of 10 to 15 persons,no operating work force,and minimal maintenance requirements.In comparison to the other fuel-saver techologies,wind power would create very 7.50 few demands on community infrastructure.Installing a 100-MW wind farm would require a construction work force of 60 over a period of a few years.The peak work force would be 140.The addition of incremental capacity to the system would permit a test period during which necessary design and siting modifications could be made.The impacts of constructing a wind farm on small communities may be significant due to the increase in work force size and length of construction period.However,the impacts should decrease as the population of the communities ne?r the sIte increases. The cost breakdown for a wind turbine investment is based on the assumption that the monitoring field work,site preparation,and installation would be performed by Alaskan labor and that all components would be imported from outside manufacturers.Therefore,~80S of the capital expenditures would be sent outside the region and 20S would remain within Alaska.The allocation of operating and maintenance expenditures would be 15S spent outside the Railbelt and 85S within the region.The high percentage of costs allocated to outside maintenance would be offset to some extent by the small requirements for supplies. Hydroelectric See Section 7.3.4 for a description of the socioeconomic considerations associated with hydroelectric power facilities. Conservation Passive Solar.Virtually no work on capital costs for passive solar has been done in the Railbelt,mainly because so few system actually have been installed.In addition,most solar buildings in the region rely on heavy insulation and efficient thermal envelopes to first reduce heat load,and often,differentiating between costs for solar and those general building costs is difficult.Preliminary studies show an increase in a range of 6S to lOS above normal construction costs for a passive solar,superinsulated home. Passive solar will create jobs and new capital ventures at a local as well as at a regional level.Because the skills required to design and install systems are relatively straightforward if standard materials and techniques are used,most likely the needed human resource exists in the region.If p~rsued on a fairly widespread scale,the potential for long-lasting jobs in new and existing businesses is promising. 7.51 An increase in employment and business at the regional level would very likely result in an increase in the amount of capital staying in the region, further providing economic benefits outside the construction sector.Certainly the extra income available to the consumer by reduced fuel expenditures will find its way into the region's economy.Whereas an in-depth economic analysis cannot be done until the degree of penetration of the solar technologies in the marketplace can be better assessed,preliminary study and common sense indicate that solar will have a positive impact on the economy. 7.4.4 Integration of Potential Environmental and Socioeconomic Impacts for Plan 2A The integration of potential environmental and socioeconomic impacts for Plan 2A are present~j in Table 7.12.The potential impacts on air quality, water quality,and ecology are moderate,and the use of refuse-derived fuel at plants in Anchorage and Fairbanks is not a major concern because the plants are of fairly small capacity compared to typical fossil fuel plants. The constr~tion of hydroelectric projects at Bradley Lake,Browne, Chakachamna and Snow present the jobs and boom/bust impacts associated with hydroelectric construction projects.The local labor markets in Anchorage and Fairbanks will be able to handle the demands created by conservation activities such as construction of refuse-power facilities. This plan would create a moderate demand for jobs,require a substantial portion of s,ending within Alaska and yet,due to the emphasis on con ~rvation activities and use of hydroelectric facilities,a great inflation effect from the rising cost of fuel would not result. 7.5 PLAN 2B:HIGH CONSERVATION AND USE OF RENEWABLE RESOURCES WITH UPPER SUSITNA Plan 2B is similar to Plan 2A except that the Upper Susitna project is built.The features specific to each load center are summarized below: Anchorage-Cook Inlet •The Bradley Lake project comes on-line in 1988. •The Upper Susitna project is available as early as 1993.The first stage of Watana (680 MW)comes on-line in 1993.Devil Canyon comes on-line in 2002. 7.52 TABLE 7.12.Integration of Potential Environmental &Socioeconomic Impacts for Plan 2A Potential Environmental and Soctoecona-tc I!plcts Suscept t. Energy Terres-Aquaticl Notse,Health Booill l.nc1-bllity Spending FacUities Air Water trtal Hartne Visua 1 and Jobs tn Bust Us.to in Alaska Added ~~Ecology Ecology &Odor Safety Alaska lllli!!Effects Inflatton (I Total) AnChora1e-coo~n1et Gas Turbine COrOOustlon Z I I I Z I I I Z 3 ZO Gas Combined Cycle Z Z Z Z Z ,Z I 3 3 30 Refuse Derived Fuel 3 Z Z Z 3 Z Z I Z I 40 Fairbanks- Tanana Va lley Wind TUr"blne....Generators I I Z I Z I I I Z I ZO U1 Refuse Derivedw Fuel 3 Z Z Z 3 Z Z I Z I 40 Hydroelectric All hon 1 Z Z Z I I Z Z Z 1 35 Bradley lake I Z Z Z Z I 3 3 3 I 65 Grant Lake 1 Z Z Z I I Z Z Z I 35 Brown I Z Z Z Z 1 3 3 3 I 65 Keetn.I Z Z Z Z I 3 3 3 I 65 Chakachamn.I Z Z Z Z I 3 3 3 I 65 Snow I Z Z Z Z I 3 3 3 I 65 Conservatlon(a)2 I Z I Z Z 3 I 1 I 80-90 Rattng Scale:1 -minor 2 -llOderate 3 -sl9ntftcant (a)Includes building conservatton.passive solar heating.and active solar hot water heating. • A 50-MW refuse-derived fuel plant comes on-line in 1992. Fairbanks-Tanana Valley •Wind-energy resources in the Isabell Pass area are developed (50 MW). 7.5.1 Capacity and Generation for Plan 2B The capacity additions and retirements for Plan 2B are shown in Table 7.13,and the electrical generation for each Gf these capacities is shown in Table 7.14.In general,the capacity additions and electrical generation are similar to Plan 2A except that the Watana and Devil Canyon dams are added in Plan 2B,replacing several of hydroelectric projects added in Plan 2A. 7.5.2 Environmental and Socioeconomic Considerations for Plan 2B The main environmental and socioeconomic considerations for Plan 2B stem from 1)the development of the Upper Susitna dams at Watana and Devil Canyon, 2)construction of Bradley Lake dam,3)construction of a refuse plant and gas combined plant in Anchorage,4)construction of a wind-turbine generator in Fairbanks and 5)the implementation of energy conservation measures,including insulation,passive solar space heating,and active solar hot water heating. These considerations have been presented previously in the following sections: Bradley Lake in Sections 7.2.3 and 7.2.4;Watana and Devil Canyon in Sections 7.3.2 and 7.3.3;and Refuse-Derived Fuel,Wind-Turbine Generators,and Conservation in Sections 7.4.2 and 7.4.3. An important feature of Plan 2B is that after 1982 no more fossil-fuel electrical-generating capacity is added and most of the ex:sting gas,oil,coal and diesel electric capacity is phased out by 2010.The penetration ~f conservation activity for this plan is given in Table 7.15;these estimates differ from Plan 2A because the penetration is determined by the cost of power, which is different for the two plans. TABLE 7.15.The Estimated Number of Homes Using the Conservation Techniques in the Year 2010 Super Passive Solar Active Hot Insulation Space Heating Water Heating Anchorage 9,211 59,872 18,422 Fairbanks 2,213 14,385 4,426 Glennallen/Valdez 423 2,7 % TABLE 7.13.Existing Capacity (1980)and Capacity Additions and Retirements (1981-2010)-Plan 2B (MW) Anchor.ge-Cook Inlet F.irb.nks-T.n.n.V.lleyon G.s G.s Refuse-Combust Ion Co.1 Wind-Tot.1 Combustion Combined-Derived TurbIn.&St ....TurbIne Total Conser- Year TurbIne Cvcle 'Fuel Dies.1 Turbin.Generators Hydroel.ctric vat ian 1980 461 139 0 266 69 0 46 (Eklutn.&0 Coop.r l.k.) 1981 0 0 0 0 0 0 12 (SolOlOOn Gulch)13 1982 -20 178 0 0 0 0 0 26 1983 0 0 0 -8 0 0 0 39 1984 0 0 0 0 0 0 0 52 1985 0 0 0 0 0 0 0 65 1986 0 0 0 -1 0 0 0 68 1987 0 0 0 -8 -4 0 0 71 1988 0 0 0 -6 0 0 90 (Br.dl.y lak.)74 1989 0 0 0 0 -5 0 0 77 1990 0 0 0 0 0 0 0 79 1991 0 0 0 -18 0 0 0 72 1992 -16 0 50 -19 0 50 0 ~~.....1993 -9 0 0 0 0 0 680 (W.tan.)58 '"1994 -30 0 0 0 0 0 0 51'"1995 -14 0 0 -33 0 0 0 44 1996 0 0 0 -102 0 0 0 44 1997 0 0 0 -65 0 0 0 45 1998 -50 0 0 0 0 0 0 45 1999 0 0 0 0 0 0 0 45 2000 -18 0 0 0 0 0 0 45 2001 0 0 0 0 0 0 0 47 2002 -51 0 0 0 -25 0 600 (DevIl Canyon)49 2003 -53 0 0 0 0 0 0 51 2004 0 0 0 0 0 0 0 52 2005 -58 0 0 0 -21 0 0 54 2006 0 0 0 0 0 0 0 57 2007 0 0 0 0 0 0 0 59 2008 -26 0 0 0 0 0 0 62 2009 0 0 0 0 0 0 0 65 2010 0 0 0 0 0 0 0 68 TABLE 7.14.Electrical Generation by Type of Capacity -Plan 2B (GWh) Anchorage-Cook [nlet fairbanks-Tanana Valley "OTT Gas Gas Refuse-Conilu"t Ion Coal Wind Total Combustion Conillned-Derived Turbine &Stea ..Turbine Total Conser- Year Turbine Cycle Fuel Diesel Turbine Generators __Hydroelectric vatia" 1981 1955 36 0 13 537 0 254 78 1982 641 1366 0 37 537 0 254 156 1983 662 1362 0 62 537 0 254 234 1984 685 1354 0 86 537 0 254 311 1985 202 2114 0 0 388 0 254 389 1986 1045 1413 0 0 494 0 254 408 1987 1169 1423 0 64 537 0 254 427 1988 943 1408 0 171 537 0 648 446 1989 1068 1425 0 319 496 0 648 465 1990 654 2474 0 1 424 0 648 484 1991 1689 1537 0 2 496 0 648 441 1992 1350 1484 394 1 496 171 648 398 1993 0 95 394 0 0 !71 4103 355 1994 0 214 394 0 0 171 4103 312 ""1995 0 44 394 0 320 171 4103 269 1996 0 42 394 0 299 171 4103 27Z '"1997 0 40 394 0 279 171 4103 274'"1998 0 38 394 0 259 171 4103 277 1999 0 31 394 0 248 171 4103 279 ZOOO 0 29 394 0 231 171 4103 281 z001 0 43 394 0 311 171 4103 292 z002 0 0 0 0 0 19 5098 303 z003 0 0 0 0 0 18 5273 313 ZOO4 0 0 0 0 0 17 5361 324 z005 0 0 0 0 0 16 5448 334 ZOO6 0 0 0 0 0 9 "624 351 z007 0 0 0 0 0 33 5800 368 ZOO8 0 0 0 0 0 30 6063 385 z009 0 0 0 0 0 5 6239 402 2010 0 0 0 0 0 20 6415 419 7.5.3 Integration of Potential Environmental and Socioeconomic Impacts for Plan 2B The integrated potential environmental and socioeconomic impacts of Plan 2B are presented in Table 7.16.The air-quality and water-quality impacts for this plan are low to moderate.With the use of the Upper Susitna projects at Watana and Devil Canyon,almost all fossil-fuel pi~nts,including gas combination turbines,coal steam turbines,oil combustion turbines and diesel electric units,are phased out.These projects would represent a significant amount of spending within the state and inflacion impacts would be low because the fossil-fuel use is phased out and replaced by hydroelectric. The main environmental and socioeconomic concerns for this plan stem from the potential for large lanj-use and boom/bust effects.Significant labor forces will be necessary to build the dams.However,in this plan the construction of the Watana and Devil Canyon dams are separated by nine year's, which would tend to distribute the boom/bust effects over a time per.od of about 15 years. 7.6 PLAN 3:INCREASED USE QF COAL This plan is based on a transition from existing generating cechnologies to alternatives that either directly or indirectly use coal as a fuel.In the Railbelt,coal is currently available from the Healy area;it is also expected to be available from the Beluga area in 1988.This plan assumes that coal- fired generation in the Anchorage-Cook Inlet load center will be located in the Beluga area.Base-load generation for the Fairbanks area depends on the costs of facilities located at Beluga compared to costs of facilities located in the Nenana area.The features specific to each load center are summarized below; Anchorage-Cook Inlet •All new generation is either coal-fired steam turbines or combined cycle units using coal-based synthetic fuels. •With the exception of Bradley Lake,no additional hydroelectric facilities are built. 7.S7 TABLE 7.16.Integration of Potential Environmental &Socioeconomic Impacts for Plan 2B Potential Environmental and Socioeconomic Impacts SuscePfl- Energy Terres-Aquatlcl Noise,Health BOOMI Land-billty Spending Facilities Air Water trial Marine Visual and Jobs In Bust Use to In ATaska Added Quality Quallty Ecology Ecology &Odor Safety Alaska Effects Effects Inflatton (X Total) AnChora1e- Cook nlet Gas Combined Cycle 2 2 2 2 2 I 2 I 3 3 20 Refuse-Oerlved Fuel 3 2 2 2 3 2 2 I 3 I 40 Falrbanks- hnana Va lley ....Wind Turbine '"Generlt~!"I 1 2 I 2 I I I 2 I 20 '" Hydroelectric Bradley Lake I 2 2 2 I I 3 3 3 I 65 Watana I 2 2 2 I 1 3 3 3 I 65 Devil Canyon 1 2 2 2 1 1 3 3 3 1 65 Conservatlon la ) 2 1 2 1 2 2 3 I I I 80-90 Rating Scale:1 -..ll1Or 2 -moderate 3 -significant (a)Includes building conservation.passive solar heating,and active solar hot water heating. Fairbanks-Tanana Valley •All new generation is either coal-fired steam turbines or combined cycle units using coal-based synthetic fuels. 7.6.1 Capacity and Generation for Plan 3 The capacity additions and retirements for this plan are shown in Table 7.17.The generation by type of capacity is shown in Table 7.18. 7.6.2 Environmental Considerations for Plan 3 In Plan 3 the main environmental consideration that has not been addressed in previous plans is the usp.of coal-gasifier combined-cycle technology.This consideration is the focus of this section.The following energy facilities are a part of this plan,but their environmental considerations have been discussed in a previous section:Gas Combustion Turbine,Gas Combined-Cycle, Coal Steam Turbine,and Bradley lake Hydroelectric in Section 7.2.3. Synthetic fuels processes such as oil shale and tar sands exist for other hydrocarbons,but coal is the logical choice for Alaska because of the large reserves in the Beluga Coal Fields and other coal deposits in the Railbelt region.The principles used to produce synthetic fUels from coal are conceptually simple and varied,depending upon the products sought.Coal is a heterogeneous solid substance with hydrogen/carbon (H/C)ratios of about 0.5 to 0.8.To convert coal to gaseous or liquid fuels,the H/C ratio is increased dramatically by carbon removal (pyrolysis,coking),hydrogen addition (direct hydrogenation),or total reformation (indirect liquefaction through the production and reaction of synthesis gas,a mixture of carbon monoxide (CO)and H2).Simultaneously,the coal molecule is fragmented into smaller units. Coal gasification systems employing these principles produce low Btu gas (e.g., 150 Btu/ft3),medium Btu gas (e.g.,350 Btu/ft3 ),and high Btu gas or substitute natural gas (e.g.,900-1000 Btu/ft3).Coal gasification plants are,for the most part,large petrochemical-like complexes. land requirements for the plants must provide 30 to 90 days coal storage, the primary facility itself,ancillary facilities such as an on-site power plant and/or a cryogenic oxygen separation plant,and product stor'age.The site must have transportation facilities for moving coal to the facility if mine-mouth sites are not available and for transporting the product from the facility. 7.5 0 TABLE 7.17.Existing Capacity (1980)and Capacity Additions and RetirefflPnts (1981-2010)-Plan 3 (MW) Anchorage-Cook Inlet Fairbanks-Tanana Valley Coal 011 Gas Gas Coal Gasifier Combustion Coal Combustion Comblned-Steam Combined Turbine &Stealll Total Year Turbine £rcle Turbine Cycle 01esel Turbine Hydroelectric 1980 461 139 0 0 266 69 46 (Eklutna &Cooper Lake) 1981 0 0 0 0 0 0 12 (Solomon Gulch) 1982 -20 178 0 0 0 0 0 1983 0 0 0 0 -8 0 0 1984 0 0 0 0 0 0 0 1985 0 0 0 0 0 0 0 1986 0 0 0 0 -1 0 0 1987 0 0 0 0 -8 -4 0 1988 0 0 0 0 -6 0 90 (8radley Lake) 1989 0 0 0 0 0 -5 0 1990 0 0 0 0 0 0 0.....1991 70 0 0 0 -18 0 0 .7>1992 -16 0 200 0 -19 0 0.;,1993 -9 0 0 0 0 0 0 1994 -30 0 0 0 0 0 0 1995 -14 0 0 200 -33 0 0 1996 0 0 0 0 -102 0 0 1997 0 0 0 0 -65 200 0 1998 -50 0 0 0 0 0 0 1999 0 0 0 0 0 0 0 2000 -18 0 0 0 0 0 () 2001 0 0 0 0 0 0 0 2002 -51 0 0 0 0 -25 0 2003 17 0 0 0 0 0 0 2004 0 0 0 0 0 0 0 2005 -58 0 200 0 0 -21 0 2006 0 0 0 0 0 0 0 2007 0 0 0 0 0 0 0 2008 -26 0 0 0 0 0 0 2009 70 0 0 0 0 0 0 2010 70 0 0 0 0 0 0 TABLE 7.18.Electrical Generation by Type of Capacity -Plan 3 (Gwh) Anchorage-Cook Inlet -Fairbanks-Tanana Valley Coal Oil Gas .Gas Coal Gasifier Combustion Coal Combustion Combined-Steam Combined-Turbine "Steam Total Year Turbine Cycle Turbine ycle Diesel Turbine Hydroelectric 1981 2017 46 0 0 27 537 254 1982 766 1386 0 0 66 537 254 1983 840 1400 0 0 105 537 254 1984 942 1386 0 0 143 537 254 1985 411 2266 0 0 0 459 254 1986 1347 1465 0 0 28 537 254 1987 1433 1506 0 0 134 537 254 1988 1248 1445 0 0 240 537 648 1989 1358 1471 0 0 387 496 648 1990 1005 2490 0 0 3 457 648 1991 1934 1660 0 0 1 496 648 1992 787 1431 1580 0 0 428 648.....1993 902 1440 J 584 0 0 436 648 '"1994 1015 1430 1611 0 0 4~2 648...... 1995 52 1028 1611 1506 0 435 648 1996 55 1043 1611 1509 0 437 648 1997 5 195 1611 1506 0 1356 648 1998 5 196 1611 1509 0 1370 648 1999 6 199 1611 1511 0 1385 648 2000 6 202 1611 1512 0 1399 648 2001 7 213 1611 1511 0 1428 648 2002 11 251 1611 1514 0 1420 648 2003 11 259 1611 1514 0 1448 648 2004 12 279 1611 1517 0 1462 648 2005 2 68 3199 1219 0 431 648 2006 2 97 3207 1264 0 532 648 2007 3 131 3211 1294 0 647 648 2008 4 164 3215 1326 0 760 648 2009 7 197 3218 1354 0 877 6413 2010 10 231 3220 1379 0 997 648 The site must have acces;to copious quantities of water for process, cooling,and other requirement~.Water serves as a source of hydrogen for altering the HIC ratio in the water gas shift reaction.Water also is the sink for waste heat. Water-quality problems can arise from leaching and surface runoff from coal storage.These impacts are similar to those of a coal-fired steam- electric facility.Other concerns include the disposal of ash from the gasifier and the steam plant. Coal gasification creates the potential for large amounts of emissions into the atmosphere.These emissions are similar to those associated with conventional combustion processes and include primarily particulate matter, sulfur oxides,nitrogen oxides,hydrocarbons,and carbon monoxide.In addition,emissions similar to those from a coal-fired boiler can come from the steam plant. The effects most difficult to mitigate from a coal gasification plant are similar to those from steam-cycle facilities because they are associatp.d with water supply and wastewater discharge requirements.In addition,the large land-area requirement could impose large construction runoff effects.Water withdrawal is associated with impingement and entrainment of aquatic organisms.Chemical and thermal discharges may have acute or chronic effects on organisms living in the discharge plume area.Thermal discharges can also cause lethal thermal shock effects in the Rai1be1t region when the discharge is stopped.The degree of these impacts will depend on many factors,such as the location of the intake and discharge structure in the water body,the chemical composition of the water supply source and discharged effluent,the plant's wa~er and wastewater management plan,and the type and quantity of aquatic organisms present in the receiving water.In general,however,the magnitude of impacts can be related to a plant's makeup water requirements. The major impact affecting the terrestrial biota and resulting from ~coal gasification plant is the loss of habitat.The plants require land areas that are two to five times that of coal-fired plants for a given energy-generating capacity.The gasification plant,electrical generating facility,and support facilities can occupy ~1000 to 3000 acres.In addition,the work force needed to support this facility will create further disturbances to local terrestrial ecosystems. 7.62 Terrestrial impacts can also result from the release of harmful air emissions.These impacts will be similar to those of gas-and oil-fired plants.While sulfur and nitrogen oxides are generally retained as a plant product,particulates and other pollutants are released into the environment. Such particulates can have adverse effects on local soils,vegetation,and animals. 7.6.3 Socioeconomic Considerations for Plan 3 The main socioeconomic considerations related to Plan 3 are associated with the use of fossil-fuel fac;'lities.Most of these considerations,Gas- Turbine Combustion,Gas Combined-Cycle,Coal Steam Turbine,and Bradley Lake Hydroelectric,were discussed in Section 7.2.4. In this section the socioeconomic concerns for coal gasification are presented.The socioeconomic impacts are difficult to predict because no U.S. experience exists from which to extrapolate employment levels.Due to the large scale of these plants,however,the construction work force requirements can be assumed to be at least equal to that of a large coal-fired power plant.The work force requirements for mining the coal would increase the impacts ot:a gasification plant by an order of magnitude of at least two.If the product is used on-site,then the cumulative impacts of a coal mine, gasification plant,and on-site power plant would be significant. The construction and operation of a gasification plant (inclUding the coal mine and power plant)would cause a permanent boom due to the large cumulative operating work force requirements.Whereas the construction work force would be substantially larger than the operating staff,the impacts caused by the out- migration of the construction work force would not be as great as the initial boom.These effects would be caused by the large scale and intensity of a plant development and,the remoteness of sites. Socioeconomic impacts would be severe at all potential sites,inclUding the Beluga and Healy area.The communities near all these coal fields are small in population.At the Beluga site,power plant components would most likely be shipped by barge and then transported over land to the site. Therefore,secondary impacts would be caused by the construction of haul roads.The largest community in the Beluga area,Tyonek,is an Alaskan native Village with a population of 239.The influx of a construction work force 7.63 would disrupt the social structure of the community.Communities near the Nenana would be severely impacted by the siting of a synthetic fuels plant as well.All of these communities are very small,with population sizes of less than 500.Installing a construction camp would not substantially reduce the impacts in these communities. 7.6.4 Integration of Potential Environmental and Socioeconomic Impacts for Plan 3 The integrated environmental and socioeconomic impacts for Plan 3 are presented in Table 7.19.The main impacts are associated with the increased use of coal.Environmental concerns include degradation of air quality and, as discussed in Section 7.2.2,compliance with the current PSD regulations can be a problem.The power plants are not aesthetically attractive and the plumes from the smokestacks and cooling towers contribute to reduced visibility. The addition of coal-based power facilities is distributed fairly evenly throughout the time period.The Anchorage and Fairbanks labor markets will probably be able to handle the job demands for construction and,therefore,a significant boom/bust impact is not expected.Note that with the increased dependency on coal,the potential for inflation effects is significant. 7.7 PLAN 4:INCREASED USE OF NATURAL GAS This plan is based upon continued use of natural gas for generation in the Cook Inlet area and a conversion to natural gas in the Fairbanks area.The key assumption in this plan is that sufficient gas will be available in the Cook Inlet area to allow utilities to continue to use it for electrical generation. Natural gas also is assumed to be available for the Fairbanks area from the North Slope beginning in 1988.Possible generating alternatives to be included in this plan include fuel-cells,combined-cycle,combustion turbine,and fuel- cell combined-cycle.The features specific to each load center are summarized below: Anchorase-Cook Inlet •The Bradley Lake project comes on-line in 1988 • •All additional generating facilities are either gas combined-cycle or fuel-cell stations. 7.64 TABLE 7.19.Integration of Potential Environmental &Socioeconomic Impacts for Plan 3 Potential Env1ronlental and Soc1oecona.1c J!p.ct$ Susceptl- Energy Terres-Aquatlc/Notse,Health BOOOlI land-bll1ty Spending Facilities Air Water trial Marine Visual and Jobs In Bust Use to in Alaska Added Quality Quality Ecology Ecology &Odor Safe!!Alaska Effects Effects Inflatton (I Tota il Anchora1e- Cook nlet Gas Turbine Coonbustlon 2 I I I 2 I I I 2 3 20 Gas COIllbined Cycle 2 2 2 2 2 I 2 2 J J 30 Coal-Fired Steam Turbine 3 2 2 2 3 2 2 2 3 3 40 Coal Gasifier COIllbined.....Cycle 3 2 2 2 3 2 2 2 3 3 '"U1 Fairbanks- Tanana Valley Coal-Fired Steall-Turbine J 2 .2 2 3 2 2 2 3 3 40 Hydroelectric Bradley lake I 2 2 2 I I J 3 3 I 65 Rating Scale:I -minor 2 -moderate 3 -significant Fairbanks-Tanana Valley •All additional capacity is either gas combined-cycle or fuel-cell stations. 7.7.1 Capacity and Generation for Plan 4 The capacity additions and retirements for this plan are shown in Table 7.20.The generation by type of capacity is shown in Table 7.21. 7.7.2 Environmental and Socioeconomic Considerations for Plan 4 For Plan 4 the main environmental consideration that has not been addressed in previous plans is the use of gas fuel-cell combined-cycle technology.This consideration will be the focus in this section.The following energy facilities are a part of this plan but were previously discussed in th~sections indicated:Gas Combined-Cycle and Bradley Lake Hydroelectric in Sections 7.2.3 and 7.2.4. Environmental Consideration.Fuel cells represent a technology that is approaching commercialization and,therefore,should be considered in Alaska. The fuel cell is fUndamentally comprised of two electrodes,(an anode and a cathode),separated by an electrolyte.Electrical energy is produced by the cell when fuel and oxygen are electrochemically combined in the electrolyte. The fuel and oxygen must be in the gaseous form,but the electrolyte may be an aqueous acid such as phosphoric acid. A complete fuel-cell plant typically consists of a fuel processor,a fuel- cell section,and electrical equipment.The fuel processor converts natural gas ~nto hydrogen and clears the gas before it goes to the fuel cell. The basic electrochemical process in the fuel-cell system is the combination of hydrugen gas and oxygen to form water.Since the fuel-cell system is hot while operating,ranging from approximately 20 0 to 1200 0 C depending upon the electrolyte,product water will experience elevated temperatures.A 10-MW plant would produce about 27,000 gal/day.This product water can either be discharged from the plant,or if in the form of steam,used either to drive a conventional steam turbine in a bottoming cycle or to reform the hydrocarbon fuel in the fuel processor.Additional makeup water may also be used to maximize the use of the reject heat in producing steam.The quantity,however,would be very design specific.Regardless of the specific facility application,an appropriate water and wastewater management plan 7.66 TABLE 7.20.Existing Capacity (1980)and Capacity Additions and Retirements (1981-2010)-Plan 4 (MW) Anchorage-Cook Inlet Fairbanks-Tanana Valley 011 Ga.Ga.Ga.Fuel-Combu.tlon Coal Ga.GIS fuel- Combu.tion C",""tned-Cell Turbine &Ste..Combined-Cell Year Turbine Cycle Stations DIesel Turbine Crete Statt.Q.!!!Total Ilxdroelectrtc 1980 461 139 0 266 G9 0 0 46 (Eklutna &Copper Lake) 19tH 0 0 0 0 0 0 0 12 (Solooon Gulch) 19112 -20 178 0 0 0 0 0 0 1983 0 0 0 -8 0 0 0 0 1984 0 0 0 0 0 0 0 0 1985 0 0 0 0 0 0 0 0 1986 0 0 0 -1 0 0 0 0 198/0 0 0 -8 -4 0 0 0 1988 0 0 0 -6 0 0 0 90 (Bradley Lake) 1989 0 0 0 0 -5 0 0 0 1990 0 0 0 0 0 0 0 0 1991 0 0 0 -18 0 100 0 0 1992 -16 0 0 -19 0 0 0 0 1993 ·9 0 0 0 0 0 200 0 1994 -30 0 0 0 0 0 0 0....,1995 -14 0 200 -33 0 0 0 0 en 1996 0 0 0 -102 0 0 0 0....,199/0 0 0 -65 0 0 0 0 1998 -so 200 0 0 0 0 0 0 1999 0 0 0 0 0 0 0 0 ZOOO -18 0 0 0 0 0 0 0 2001 0 0 0 0 0 0 0 0 2002 -51 0 II 0 -25 0 0 0 2003 -53 0 0 0 0 0 0 0 2004 0 0 0 0 0 0 0 0 2005 -58 0 0 0 -21 100 0 0 2006 0 0 0 0 0 100 0 0 200/0 0 0 0 0 0 0 0 2008 -26 0 0 0 0 0 200 0 2009 0 0 0 0 0 0 0 0 2010 0 0 0 0 0 0 0 0 TABLE 7.21.Electrical Generation by Type of Capacity Plan 4 (GWH) ,Anchorage-Cook Inlet Fairbanks-Tanana Valley OTI Gas Gas Gas Fuel-Combustion Coal Gas Gas Fuel- Combust ion Combined-Cell Turbine &Steam Combined-Cell Year Turbine Cycle Stations Diesel Turbine Cycle Stations Total Hydroeleclric 1981 2007 44 0 26 537 0 0 254 1982 747 1382 0 63 537 0 0 254 1983 811 1394 0 100 537 0 0 254 1984 903 1378 0 137 537 0 0 254 1985 368 2250 0 0 452 0 0 254 1986 1264 1446 0 11 537 0 0 254 1987 1324 1467 0 108 537 0 0 254 1988 1080 1420 0 204 537 0 0 648 1989 1159 1434 0 342 537 0 0 648 1990 696 2481 0 1 4 j 0 0 648 1991 1685 1528 0 1 440 3 0 648 1992 1777 1528 0 0 496 1 0 648 1993 1781 1615 0 0 496 4 48 648 1994 1754 1731 0 0 496 8 84 648 .....1995 144 3434 1611 0 496 30 263 648.1996 14 1964 161!0 496 29 267 648 '"co 1997 14 1973 1611 0 496 34 272 648 1998 13 1982 1611 0 496 4 36 648 1999 13 1992 1611 0 496 4 37 648 2000 15 2002 1611 0 496 4 38 648 2001 15 2025 1611 0 496 5 46 648 2002 7 2248 1611 0 289 9 74 648 2003 1 2271 1611 0 289 10 85 648 2004 1 2293 1611 0 289 12 98 648 2005 1 2296 1611 0 124 21 667 648 2006 1 2341 1611 0 124 30 773 648 2007 1 2374 1611 0 124 39 883 648 2008 2 2398 1611 0 124 9 1240 648 2009 2 1283 1611 0 124 13 2886 648 2010 0 1293 1611 0 124 18 2910 648 incorporating suitable waste-heat rejection technologies must be implemented to ensure that thermal discharges comply with pertinent receiving stream standards. Gaseous emissions from the operation of fuel cells are very low when compared to alternative methods that use combustion techniques.Sulfur and nitrogen will be gasified,not oxidized,and can easily be t'ecovered from process streams.Fuels that are essentially free of such pollutants,such ~s hydroger.or natura 1 gas,wi 11 not 1ead to any po llu tant emi ss iDns.Carbon dioxide and water vapor will be formed in large quantities,similar to that associated with combustion.However,no detectable environmental impacts will be associated with these emissions.Because of the high efficiences of fuel cells and the ease of controlling potential pollutants,fuel cells represent a dramatic improvement in air-quality impacts over combustion technologies. The impacts of fuel-cell energy systems on terrestrial biota are relatively slight since the air pollution potential is very low and small land areas are required ('u one acre for a 5-MW facility).Noise and other potential disturbance factors are also relatively low.Furthermore, these plants will be sited within or adjacent to developed areas where access road requirements are minimal. Socioeconomic Considerations.Sites for fuel-cell plants should be constrained by the population size of the community since construction work force requirements are relatively large and may cause significant impacts in very small and small communities.Approximately 90 persons would be required to construct a 10-MW plant for a period of less than 1 year.Impacts would be minor to moderate in Anchorage,Fairbanks,Soldotna,Kenai,Valdez,Wasilla, and Palmer. Capital expenditures that would fl~w out of the region due to development of a fuel-cell facility would include investment in high-technology equipment. An expected 80S of the project expenditures would be made outside the region, whereas 20S would be spent within the Railbelt.The allocation of operating and maintenance expenditures spent outside the Railbelt is expected to be ~lOS. Advantages of fuel-cell stations include highly competitive energy costs, short design and construction lead time,very favorable environmental characteristics and favorable public acceptance (the latter largely because of lack of adverse environmental effects).Use of local siting should minimize transmission losses.Additionally,the units,being modular in nature,should be insensitive to economics of scale;this combined with short lead time would 7.69 allow c3p?£ity increases to closely follow demand.The units may be operated in either a base load or load-following mode;unit efficiencies remain high at partial power operation. 7.7.3 Integration of Potential Environmental and Socioeconomic Impacts for Plan 4 The integrated environmental and socioeconomic impacts are presented in Table 7.22.The air-quality,water-quality,ecological and health impacts of this plan are low to moderate due to the use of hydroelectric and natural gas power facilities.Furthermore,gas turbine combustion,oil turbine combustion and diesel electric units are phased out.Bradley Lake is the only new hydroelectric project used and,thus,local boom/bust impacts will be associated with its construction. Compared to the previous plans,this plan represents a large amount of spending outside of the state.This situation is caused mainly by the "high technology"aspects of fuel-cell systems and,to a lesser extent,a similar situation exists for gas combined-cycle units.The increased use of natural gas would make inflation effects significant. 7.70 TABLE 7.22.Integration of Potential Environmental &Socioeconomic Impacts for Plan 4 Potential Environmental and Socioeconomic I~acts Susceptl- Energy Terres-Aquattcl Hotse.Health BOOlllI Land bll1ty Spending Facll1ttes Air Water trial Hartne Visual and Jobs in Bust Use to to Alaska Added Quality Quality Ecology Ecology &Odor Safety Alaska~Effects Effects hflatlon (I Total) AnChCra~ei 00 nlet Gas ColI'btned Cycle 2 2 2 2 2 I 2 2 3 3 30 Gas Fuel Cell Stations I I 2 2 2 I Z 2 I 3 20 Falrbanks- Tanana Valley ....,Gas CoII'blned....,Cycle 2 2 2 2 2 I 2 2 3 3 30..... Gas Fuel Ce 11 Stat Ions I I 2 2 2 I 2 2 I 3 20 HYdroelectric Bradley Lake I 2 2 2 I I 3 3 3 I 65 Impact Rating Scale:1 -minor 2 -moderate 3 -significant 7.8 8IBLIOGRAPHY Acres American Incorporated.1981. Power.Phase I Report,Volume I. of the Governor by Acres American Preliminary Assessment of Cook Inlet Tidal Prepared for the State of Alaska,Office Incorporated,Columbia,Maryland. Acres American Incorporated.1981.Preliminary Assessment of Cook Inlet Tidal Power.Phase I Report,Volume II.Prepared for the State of Alaska,Office of the Governor by Acres American Incorporated,Columbia,Maryland. Acres American Incorporated.1981.Susitna H~droelectric Project -Development Seiection R2port.Prepared for the Alaska ower Authority by Acres American Incorporated,Buffalo,New York. Acres American Incorporated.1981.Susitna Hydroelectric Project -Development Selection Report,Appendices A-I.Prepared for the Alaska Power Authority by Acres American Incorporated,Buffalo,New York. Barkshire,J.A.1981.Energy Conservation,Solar,and Wood for Space and Water Heat~o+Prepared by Alaska Renewable Energy Associates for Battelle, Pacific Northwest Laboratories,Richland,Washington. Bechtel Civil and Minerals,Inc.1981.Chakachamna Hydroelectric Project. Job 14879,prepared for the Alaska Power Authority by Bechtel Civil and Mi~rals,Inc.,San Francisco,California. CH~M Hill.1980.Feasibility Assessment:Hydropower Development at Grant Cake.Prepared for the City of Seward by CH 2 MHill,Anchorage,Alaska. Ebasco Services Incorporated.1981.Railbelt Electrical Power Alternatives Study -Technolo~y Assessment Profile Report,An Overview.Prepared by Ebasco Servlcesncorporatea for Battelle,PacIfIc Norothwest Laboratories, Richland,Washington. Ebasco Services Incorporated.1981.Railbelt Electric Power Alternatives Study -Wind Energy Conversion System Alternative,25 MW System.Prepared by Ebasco Services Incorporated for Battelle,Pacific Northwest Laboratories, Richland,Washington. Jacobsen,J.J.,W.H.Swift,and J.C.King.1981.Preliminary Railbelt Electric Energy Plans.Prepared for the Office of the Governor,State of Alaska,by Battelle,Pacific Northwest Laboratories,Richland,Washington. King,J.C.,et al.1981.Candidate Electric Energy Technologies for Future Application if'the Alaska Railbelt Region.Battelle,Pacific Northwest Laboratories,Richland,WashIngton. United States Army Corps of Engineers.1981.Electrical Power for Valdez and the Copper River Basin.U.S.Army Corps of Engineers,Alaska District, Anchorage,Alaska. 7.72 8.0 SENSITIVITY ANALYSIS This chapter presents the results of tests conducted to evaluate the sensitivity of the levelized cost of power to changes in several key parameters. In general,the levelized costs of power change by less than 5%in all the sensitivity tests.From these analyses the levelized costs of power can be concluded to be relatively insensitive to changes in fuel price escalation rates,forecasted demand,capital cost estimates,and generation efficiency. Whereas the effect on specific electric energy plans varies with the sensitivity test being done,the most sensitive estimate analyzed is the Upper Susitna capital cost estimates (in Plans 18 and 2B)with variations of about plus or minus 9%.Based upon these analyses,the following general conclusions can be drawn regarding the relative costs of the various plans. Plan lA:Base Case Without Upper Susitna The levelized costs of power for this plan are relatively stable among the various sensitivity tests.Generally,Plan lA is neither the highest nor lowest cost plan.The costs are stable because this plan includes a more diverse mix of supply options than the other plans.Rapidly increasing demand during the 1990-2010 time period causes this cost of the plan to be relatively high. Plan IB:Base Case With Upper Susitna Except for the case assuming higher than anticipated capital costs for the Upper Susitna project,this plan provides relatively low power costs over the 1981-2010 time period.Also,the plan provides either the lowest or nearly the lowest cost of power in all sensitivity tests over the extended time period.It does relatively less well in cases with lower demand growth. Plan 2A:High Conservation and Use of Renewables Resources Without Upper Susitna This plan has relatively high power costs in most cases.The costs are high mainly because of the plan's reliance upon hydroelectric projects that have high capital costs relative to the Upper Susitna project and because it does not have coal steam electric as an option.This project has the highest cost of power in the case where electrical demand increases rapidly after 1990. 8.1 Plan 28:High Conservation and Use of Renewable Resources with Upper Susitna This plan has much the same behavior as Plan lB.This similarity is to be expected since they both include the Upper Susitna project.This plan has slightly higher costs of power than Plan 1B over the extended time horizon. Pl an 3:Increased Use of Coal This plan generally produces relatively high costs of power over the 1981- 2050 time period.It is more attractive in the case with lower fuel r;"ice escalations. Plan 4:Increased Use of Natural Gas The plan behaves very similarly to Plan 3.It provides the lowest cost of power over the 1981-2010 time period in the case of lower fuel price escalation rates and the case of reduced demand beyond 1995.It is generally one of the higher cost alternatives over the extended time horizon. 8.1 INTRODUCTION In any parametric analysis,such as is presented in the previous chapter, a great deal of data is required to describe the system being analyzed;e.g., the Railbelt electrical generation systems.The purpose of a study such as this is to either collect or to develop d.lta and information that will allow the readers to make know edgeable decisions regarding the subject being evaluated.If the data and procedures used in the analyses were exact estimates of the "real world,"the evaluation results would be exact,and therefore no uncertainty regarding the results would exist. Unfortunately,some level of uncertainty is associated with all data; i.e.,the "correct"value for a parameter mG\Y be either larger or smaller than the value selected to be used in the analysis.For example,the capital cost of coal steam turbine generating units located in the Beluga area has been estimated to be $2051/kW expressed in 1982 dollars.The only way to be completely certain of the capital costs of such units is to build one.As a result,the cost estimate of $2051/kW has some uncertainty associated with it; i.e.,the correct cost estimate may be either higher or lower than the estimate of $2051/kW. 8.2 Furthermore,analyses procedures are not exact representations but rather simplifications of the real world.Because of these two factors,the results of any parameteric analysis have uncertainty associated with them.In some cases the uncertainties are relatively small,and therefore,the effects of these uncertainties on the overall results of the evaluation may be relatively small.In other cases,the uncertainties associated with a particular parameter or calculation may be relatively large,but the impact of the uncertainties on the overall results may be relatively small.In both of these cases,the overall effects of uncertainty could perhaps be neglected. However,in many cases the effects of ·the uncertainties do have a significant i,;pact on ana lyses resu 1ts. Since uncertainty is associated with any piece of data and computational procedure,it must be recognized and dealt with when evaluating analysis results.The most direct way to test the effects of uncertainty in a parameter on the analysis results is to select parameter values that are either higher or lower than the selected or "best guess"estimate and redo the analysis to see how much the results change.If the change is significant,the results are said to be sensitive to the parameter estimate.If little change occurs,the results are said to be insensitive to the parameter estimate.The amount of change in the results necessary for the analysis to be deemed sensitive to a input parameter varies depending upon the analysis.In some analyses,a change of 1%in the result may be quite significant,whereas in other analyses,much larger changes could be neglected. In the context of this study,perhaps the best determination of whethe\· the results are sensitive to a parameter is if changes in the parameter affect the ranking of the electric energy plan relative to the other plans.While the electric energy plans were being developed and evaluated,many computer runs were made to estimate the sensitivity of the RED and AREEP models to various parameters.To document and report the results of all of these runs would be time consuming and would make for boring reading.However,to help the reader understandthe sensitivity of the analyses,the results of several sensitivity runs are presented in the following sections. 8.2 UNCERTAINTY IN FOSSIL FUEL PRICE ESCALATION Although an intensive effort was made in this study to forecast the future prices and availability of fossil fuels and electricity in the Railbelt region, 8.3 note that these best forecasts are subject to a high degree of risk from several sources.These sources include international political events affecting both the prices of oil and coal,national policies affecting the pricing and delivery of natural gas and oil,and national and state policies affecting both the prices of electricity and energy conservation.Also, because economic behavior of indiViduals_businesses,and governw~nt in response to future fuel price changes must be extrapolated from past behavior, the degree of substitution among fuels and the degree of energy conservation are also uncertain.This section briefly summarizes the effects of uncertainty in fuel price escalation on future electricity demand. 8.2.1 Effects of Uncertainty in Fossil Fuel Price Escalation on Cost of Power As discussed in Chapter 2,a long-term world oil prlc~escalation rate 2% faster than inflation is assumed over the study's time horizon.In this series of sensitivity tests,world oil prices are assumed to escalate at rates •1~ and 3%to evaluate the effects of lower and higher fuel price escalation rates on-the cost of power and electricity demand.Because other fossil fuel price escalation rates are assumed to be linked to world oil prices,the long-term escalation rates of other fuel prices are modified to be consistent with the price of oil.In Table 8.1 the levelized costs of power for the 1%and 3%fuel price escalation rates are compared with the costs of power for the 2%fuel price escalation rate case (presented in Chapter 7.0). TABLE 8.1.Levelized Costs of Power for Alternate Fuel Price Escalation Rates (mills/kWh) 2%Escalation 1%Escalation 3%Escalation 1981-1981- 1981-1981-1981-1981- 2010 2050 2010 2050 2010 2050-- -- ------ Plan 1A 58 64 56 61 60 67 Plan 1B 58 59 57 61 57 58 Plan 2A 59 66 57 64 61 69 Plan 2B 58 61 58 63 57 58 Plan 3 59 65 58 62 62 71 Plan 4 59 66 55 62 61 68 In the 1%real escalation rate case,levelized power costs generally dropped in the cases using relatively high amounts of fossil fuels for 8.4 8.5 generation (Plan lA,3,and 4)over both periods of analysis.This drop reflected the reduced cost of generation.The plans using relatively less fossil fuels for generation (Plans 1B,2A,and 2B)have a slight cost reduction over the 1981-2010 time period,but show a slight increase in power costs over the longer time period.This increase occurs because the price of fossil fuels relative to electricity gradually decreases,causing consumers to switch fuels.This switch reduces demand for electricity,which slightly increases the cost of electricity over the longer time period for these plans.The ilnpacts of lower and higher fuel price escalation on the demand for electricity are discussed later in this section. A 1%fuel price escalation rate reduces the relative advantage of the plans that include the Upper Susitna project.If fuel escalation rates were further reduced,the relative advantage of those plans would be reduced further. In the case assuming a 3%escalation rate in fuel prices,power costs increased in those plans using relatively high amounts of fossil fuels and decreased in the plans less reliant on fossil fuel for generation.In the cases using relatively large amounts of fossil fuel for generation,the higher costs of fuel increased the cost of generation.In the plans less reliant on fossil fuels,the costs declined be~ause the price of electricity declined relative to fossil fuels.This decline then caused people to switch to electricity,which increased demand.The increased demand in turn reduced the costs.(The consumer reaction to changes in relative prices is discussed in greater detail in Section 8.2.4.) 8.2.2 Effects of Uncertainty in Fossil Fuel Prices on Demand for Electricity The effects of the alternate fossil fuel price escalation rates on the peak demand for electricity in the year 2010 are presented in Table 8.2. For the 1%fuel escalation rate case,the plans that rely relatively heavily upon fossil fuels (Plans lA,3 and 4)generally show a slight decline in demand,whereas those plans that are less dependent upon fossil fuels show a more significant decline in demand for electricity.In the former cases,both electricity and fossil fuel prices are lower than in the base case,causing the demand for both fossil fuels and electricity to increase.However,the effects of fuel sWitching away from electricity appears to outweigh the effects of lower electricity prices. The plans that are less a larger decline in demand. reliant on fossil fuels (Plans 1B,2A and 2B)show In these cases,the price of fossil fuels goes TABLE 8.2.Effect of Alternate Fuel Price Escalation Rates on Peak Electricity Demand in 2010(MW) 2%1%3% Escalation Escalation Escalation Plan 1A 1260 1160 1310 Plan 1B 1350 1160 1560 Plan 2A 1130 1040 1160 Plan 2B 1250 1050 1450 Plan 3 1190 1130 1200 Plan 4 1220 1180 1260 down relative to the price of electricity because the price of electricity is not heavily influenced by the drop in fossil fuel prices.This relative price advantage of fossil fuels causes fuel sWitching to take place away from electricity and toward fossil fuels. In the 3%fuel escalation case the demand for electricity goes up in all cases for tr~same reasons it declined in the previous case.In these cases the price c,f electricity goes down relative to fossil fuels,causing fuel switching to electricity.Again,the greatest amount of fuel switching takes place in those cases that are less reliant on fossil fuels. 8.2.3 Consumer Reaction to Changes in the Price of Electricity Relative to Other Forms of Energy The effects of fuel and electricity price changes depend on consumer reactions to those changes.These reactions were summariZed in the RED model in a set of short-and long-run demand "elasticities"for electricity.An elasticity is the ratio of two percentage changes.Own-price elasticity is the percentage change in quatltity of electricity demanded divided by a given percentage change in the price of electricity.Cross-price elasticity is the percentage change in quantity demanded of electricity for a given percentage change in the prices for substitute fuels SUC:1 as natural gas and oil.The own- price and cross-price elasticities of demand are usually larger as the period of time over which the consumer has to react to a given chlnge in prices gets longer,because he is able to make more costly chlnges in his fuel-using equipment over the longer time period. 8.6 The REO model relies on elasticities derived from a review of econometric -estimates of demand for electricity in the United States to forecast the effects of fuel price changes on the demand for electricitv.The "best guess" elasticities used when the model is run in its certainty mode (default values) are shown in Table 8.3.8ecause various sources estimated the elasticities in different contexts,using a variety of data sets,and producing different estimates,the REO model also contains for elasticities a range of values that can be selected randomly by ~he model's Monte Carlo routine.This range of values is also shown in Table 8.3. TABLE 8.3.Elasticities of Demand and Load Factors Used in the REO Hodel Sector, Defau'lt Va lue and Range Short-Run (1 Year)Elasticity Residential: Default Value Range -.15 (-.00 to -0.54) .01 (.01 to .03) .05 (.05 to .10) Business: Default Value Range -.30 (-.20 to -.54) .03 (.01 to ,05) .05 (.01 to .10) Sector, Defau lt Value and Range Long-Run (7 Year)Elasticity Percentage Change in Electricity Demanded for a One Percent Increase in the Price of: Electricity Fuel Oil Natural Gas -1.50 .13 .50 (--1.02 to -2.00)(.05 to .21)(.17 to .81) -1.00 .20 .30 (-.87 to -1.36)(.15 to .31)(.18 to .41) Load Factors Electricity Fue 1 Oil Natural Gas .5573 .4899 .5216 (.492 to .634)(.416 to .591)(.454 to .612) Residential Default Value Range Business Default Value Range Default Value and Range Default Value Range Source:King and Scott 1982. As consumers change their uses of electricity in response to changing energy prices,the pattern of u~e during the year also will change.Very 8.7 little data are available to quantitatively link the changes in the pattern of energy use in Alaska to changes in the ratio of average annual electrical load to peak load when relative prices change.To reflect this uncertainty in the ratio of average annual connected load to peak demand -the so-called "load factor"-the RED model allows the annual load factor to vary.The historic average in each load center is used as the default value when the model is run in its certainty-equivalent mode.In each load center,the load factor is allowed to range from the highest to the lowest value recorded for any utility in the load center during the 1970's.The assumed default value and range of values for load factors for each load center are shown in Table 8.3. Figure 8.1 shows the effect on peak demand of allowing price elasticities and load factors to vary.The shaded zones on the figure are the 50% "confidence intervals"for the high,medium,and low economic scenarios combined with the 1A supply p1~n and 2%world oil price escalation.The probi1ity of the forecast being higher than the value indicated by (.25)in the figure is 25%,given the economic growth scenario.The probability is 75%that it is higher than the value marked (.75)in each case.The probi1jty is therefore 50%that the true value lies between those values.As Figure 8.1 shows,the peak demand's central value for year 2010 is 1280 MW,with a 50%probability of lying between 1150 and 1400 MW.Using the default value for elasticity of demand and load factors in the moderate case,demand was 1260 MW.The figures differ for Monte Carlo and certainty-equivalent cases because only 20 iterations were done of the model to generate the distributions in Figure 8.1.Increasing the number of iterations to 100 reduces the mean demand to 1260 MW.In the figure shown,1280 MW is the median demand.The figure indicates that a reasonable rule of thumb for the forecasts is that, given the economic scenario,the forecast demand is the central (default) value,plus or minus about 100 MW with 50%confidence.If higher confidence were ~uired,the confidence interval would widen somewhat.Therefore,as Figure 8.1 shows,the forecast cases are Virtually indistinguishable until late in the forecast period because of uncertainty concerning consumer response to energy prices. 8.3 UNCERTAINTY IN ELECTRICITY DEMAND FORECASTS 8.3.1 High-High Economic Scenario As discussed in Chapter 3,electrical demand forecasts were made for six economic scenarios.The analysis and discussion presented in Chapter 7 assumed 8.8 (.25) 1'00 HH (.75) 1500 (.25) 1210 MM (.75) (.25) IlXXl 1000 LL (.75) ... 500 1980 1985 19'1O 1995 2000 2005 2010 FIGURE 8.1.Sensitivity Test of Peak Demand:Monte Carlo Simulation with Varying Price Elasticities and Load Factors 8.9 the medium load growth scenario (medium private economic growth and medium state spending).In this section the effects of higher load forecasts on the levelized cost of power are presented and discussed.The analysis was conducted for the high economic scenario (high private economic growth and high state spending).The peak demand and annual energy consumption for the year 2010 for the medium (base case)and high economic scenario are presented in Table 8.4. TA8LE 8.4.Peak Demand and Annual Energy in 2010 for the Medium and High Economic Scenarios Medium Economic Scenario Peak Annual ~Energy (GWH) Plan lA Plan IB Plan 2A Plan 2B Plan 3 Plan 4 1260 1350 1130 1250 1190 1220 6260 6690 5520 6100 591O 6060 High Economic Scenario Peak Annual ~Energy (GWH) 1760 9010 IB90 9630 1510 7650 1820 9160 1610 8280 1650 8470 The levelized costs of power for each plan for the medium economic scenario are compared to the levelized costs of power for the high economic scenario in Table 8.5 for the time periods 1981-2010 and 1981-2050. TABLE 8.5.Levelized Costs of Power for Medium and High Economic Growth Scenarios (mills/Kwh) !~dium Economic Scenario Hirh Economic Scenario 1981- 1981-981-1981- 2010 2050 2010 2050-- Plan lA 58-64 60 66 Plan IB 58 59 58 60 Plan 2A 59 66 58 66 Plan 2B 58 61 57 59 Plan 3 59 65 62 68 Plan 4 59 66 61 68 As shown in Table 8.5,in the high economic scenario Plan 28 has thp lowest levelized cost of power over both periods of analysis (57 mills/kWh over 8.10 the 1981-2010 time period and 59 mills/kWh over the 1981-2050 time period). Plans 1B and 2A both yield 58 mill/kWh power over the 1980-2010 time horizon. However,over the extended time horizon Plan 1B gives a cost of power of 60 mills/kWh compared with'66 mills/kWh for Plan 2A.Plans lA,3,and 4 all have higher costs of power over both time horizons.This analysis indicates that the plans including the Upper Susitna project will become more attractive for higher electrical energy demands. 8.3.2 Low-Low Economic Scenario In this sensitivity test,the effects of lower forecasted electrical demand on the levelized costs of power are evaluated for each of the electric energy plans.For this comparison the low private economic growth and low state spending economic scenario is used.The peak demand annual energy forecasted for the year 2010 for the medium and low economic scenarios is presented in Table 8.6. TABLE 8.6.Peak Demand and Annual Energy in 2010 for Medium and Low Economic Scenarios Medium Economic Scenario Low Economic Scenario Peak Annual Peak Ar.nual ~Eneroy (GWH)~Energy (GWH) P1~n 1A 1260 6260 1000 4940 Plan 1B 1350 6690 990 4880 Plan 2A 1130 5520 920 4490 Plan 2B 1250 6100 980 4760 Plan 3 1190 5910 960 4730 Plan 4 1220 6060 1010 4980 The levelized costs of power for the medium and the low economic scenarios are presented in Table 8.7 for the two periods of analysis,1981-2010 and 1981- 2050. For the low economic forecast and 30-year time frame,the lowest levelized costs of power result from Plans 2B and 4 (57 mills/kWh).Plans lA,1B,2A and 3 have slightly higher costs of power (58 mills/kWh).Over the longer ti~~ period Plans 1B and 2B have slightly lower costs. 8.11 TABLE 8.7.Leve1ized Costs of Power for Medium and Low Economic Growth Scenarios (mills/kWh) MediLm Economic Scenario Low Economic Scenario 1981-1981-1981-1981- 2010 2050 2010 2050-- Plan 1A 58 64 58 65 Plan 1B 58 59 58 63 Plan 2A 59 66 58 66 Plan 2B 58 61 57 61 Plan 3 59 65 58 67 Plan 4 59 66 57 64 8.3.3 Effects of Electrical Load Growth Higher and Lower Than Forecasted After 1990 Unforeseen events may cause demand to be significantly higher or lower than expected after the state has committed itself to a demand forecast and supply strategy.Because constructing some generating options requires high cost and long lead times,the uncertainties in demand is a cause for some concern.To evaluate the impact of incorrect initial forecasts of demand on cost of power,two cases were examined.The first case assumes that the state begins to build for demand that never materializes because of post-1990 events.The second case assumes that post-1990 demand is initially underestimated,and shorter term solutions (at higher cost)must be formed to meet higher demand. Load Growth Begins-as in the Medium-Medium Economic but Levels off After 1990 In this case electrical demand is assumed to grow as projected in the medium-medium economic scenario (MM)but levels off and declines slightly beyond 1990.This case is similar to the load growth in the nonsustainab1e spending scenario (CC).The electrical demand for this case is shown in Figure 8.2,and the 1eve1ized :osts of pm~r are given in Table 8.8. As shown in Table 8.8,the reduced demand has relatively little impact on the 1eve1ized costs of power over the 1981-2010 time period.Over the longer time period the costs of power of all the plans go up;however,the costs of 8.12 1900 1700 lSOO ~l3000z ~ 0 1100~ ~... 900 700 I NCREASED GROWTH t.'lDI UM GROWTH / ._--~ .~ '",REDUCED GROWTH'-- 500 19lIll 1985 1m 1995 2000 2005 2010 FORECAST YEAR FIGURE 8.2.Electrical Load Growth for Increased and Reduced Growth Beyond 1990 8.13 TABLE 8.8.Levelized Costs of Power for Reduction in Electrical Demand After 1990 Medium Economic Scenario Reduced Growth Scenario 1981- 1981-1981-1981- 2010 2050 2010 2050 Plan 1A 58 64 58 67 Plan 1B 58 59 59 67 Plan 2A 59 66 58 67 Plan 2B 58 61 60 69 Plan 3 59 65 59 70 Plan 4 59 66 57 66 power for the plans includin9 the Upper Susitna project (lB and 2B)go up more than the costs of power for the other plans.This increase results because the 'Watana Dam is built and comes on line in 1993,about the time when the demand begins to taper off.The Devil Canyon dam is not built in either case 1B or 2B in this test. Load Growth Begins As Projected in the Medium-Medium Economic Scenario but Increases After 1990 In this sensitivity test the electrical demand is assumed to grow as projected in the medium-medium economic scenario but increases after 1990. Demand increases are assumed to be same as the industrialization case by 2010. The electrical demand for this case is shown in Figure 8.2 and the levelized costs of power for this 'case are shown for the two periods in Table 8.9. TABLE 8.9.Levelized Costs of Power for Increase in Electrical Demand After 1990 Medium Economic Scenario Increased Growth Scenario 1981-1981--r981-1981- 2010 2050 2010 2050 Plan 1A 58 64 66 74 Plan 1B 58 59 63 68 Plan 2A 59 66 71 80 Plan 2B 58 61 62 67 Plan 3 59 65 6J 79 Plan 4 59 66 68 78 8.14 In the increased growth scenario the costs of power increase subtantially in both time periods.The cases including the Upper Susitna project (lB and 26)provide the lowest cost of power in both time periods. B.4 UNCERTAINTY IN COST ANO AVAILABILITY OF MAJOR ALTERNATIVES 8.4.1 Capital Cost of Upper Susitna Project-2OS Lower and Higher than Estimated The large size and capital intensive nature of the Upper Susitna project makes the capital cost estimates for this project an important determinant of the overall power costs within the region.T~e capital cost estimates for the Upper Susitna Project were developed by Acres American Incorporated (1981b)as part of the Susitna hydroelectric project feasibility study and are presented in Chapter 4. To evaluate the possible effects of lower and higher capital costs, sensitivity tests were done assuming that the capital costs of the project are 20%lower and 20%higher than shown.Because the Upper Susitna project is inc luded on ly in Plans 1B and 2B,on ly those cases were Y'erun.The resu Its of these sensitivity tests are presented in Table 8.10 for the periods 1981-2010 and 1981-2050. TABLE 8.10.Levelized Costs of Power for Upper Susitna -Capital Costs 20%Lower and Higher Than Estimated (mills/kWh) Base Case 20%Lower 20%Higher 1981-1981-1981- 1981-1981- 1981- 2010 2050 2010 2050 2010 2050 Plan lA 58 64 58 64 58 64 Plan IB 58 59 54 54 61 64 Plan 2A 59 66 59 66 59 66 Plan 2B 58 61 54 55 62"66 Plan 3 59 65 59 65 59 65 Plan 4 59 66 59 66 59 66 As shown,the levelized costs of power are extremely sensitive to the changes in these capital cost estimates.If the capital costs are 20%lower than estimated,Plans 1B and 2B provide significantlY lower power costs than 8.15 the other plans in both periods of analysis (especially in the 1981-2050 time period).If the capital costs are 20%higher than estimated,Plans 1B and 2B become relatively high-cost plans relative to other plans in the 1981-2010 time period and about equal over the longer time period. 8.4.2 Capital Cost of Coal Steam-Electric Power-Capital Costs -20%Higher and Lower Than Estimated As part of the Railbelt Electric Power Alternatives Project,capital costs were estimated for 200-MW coal-fired steam-electric power plants lor.ated in both the Beluga and Nenana areas.As presented in Chapter 4,these costs are ~2051/kW for a plant located at Beluga and $2107/kW for a plant located at Nenana.New coal steam-electric plans are included in Plans 1A and 3.The results of these sensitivity tests are presented in Table 8.11 for the two periods of analysis,1981-2010 and 1981-2050. TABLE 8.11.Levelized Costs of Power for Coal Steam Turbine Plant -Capital Costs 20%Lower and Hi9her than Estimated (mills/kWh) Base Case 1981-1981- 2010 2050---- 20%Lower 1981-1981- 2010 2050---- 20%Higher Plan lA Plan 1B Plan 2A Plan 2B Plan 3 Plan 4 58 58 59 58 59 59 64 59 66 61 65 66 57 58 59 58 57 59 62 59 66 61 63 66 59 58 59 58 60 59 65 59 66 61 67 66 As shown in Table 8.11,the effects of higher and lower coal plant capital costs have little effect on the relative costs of the various plans. 8.4.3 Penetration of Conservation Alternatives Higher and Lower than Estimated In this case the maximum market penetration of conservation alternatives was increased and decreased by 20%to test their impact on the cost of power. The conservation alternati,es includec in this plan are building conservation, passive solar spac~heating,active solar hot water heating,and wood-fired space heating.To test the sensitivity of subsidized conservation on the cost 8.16 of power,the number of installations of all conservation options was simultaneously increased or decreased by 20%.The subsidized market was not allowed to exceed 100%of households.However,if the decreased amount fell below the level of conservation predicted with no subsidies,the nonsubsidized market penetration rate was also decreased by 20%to permit the lower number. Because these alternatives are dealt with explicitly only in cases 2A and 2B, only those cases were rerun.The results are shown 'n Table B.12 for the two periods of analysis. TABLE B.12.Leve1ized Costs of Power for Penetration of Conservation Alternatives 20%Higher and Lower than Estimated (mills/kWh) Base Case 20%Lower ro%Higher 1981- 1981-1981-1981-1981-1981- rol0 ro50 rol0 ro50 rol0 2050 Plan lA 58 ~58 ~58 ~ Plan IB 58 59 58 59 58 59 Plan 2A 59 66 ro ~59 65 Plan 2B 58 61 59 ~57 ro Plan 3 59 ffi 59 ffi 59 ~5 Plan 4 59 66 59 66 59 66 As shown in Table 8.12,changes in the penetration rates have relatively little effect on the cost of power.In general,lower penetration rates tend to increase the costs of power,whereas higher penetration rates tend to decrease cost of power.This situation reflects the fact that the conservation alternatives generally cost less per kWh saved than the cost of generation and delivery. 8.4.4 Effects of Increased Thermal Generating Efficiency One of the factors that influences the cost of generating electricity using fossil fuels is the heat rate.The heat rate is the efficiency with which a generating unit converts Btus of fuel into kWhs of electricity.As newer materials and designs for thermal generating plants are developed,the heat rates for these plants are expected to go d~wn;i.e.,they are expected to become more efficient.In this test the heat rates for new thermal options added after 1980 were lowered,as sho~n in Table 8.13,to reflect such improvements in performance.Because some of this added capacity is already under construction or on.order,these assumptions may overstate the overall savings that result from lowered heat rates. 8.17 TABLE 8.13.Assumed Improvements in Heat Rates (Btu/kWh) Generating Base Case Improved Alternative Heat Rate Heat Rate Combustion Turbine 12,200 10,000 Combined Cycle B500 8000 Coal Steam Turbine 10,000 95oo Fuel Cells 92OO 8500 Coal Gasification Combined-Cycle 93oo 8700 The effects of these improvements were evaluated in Plans 3 and 4.The results of these tests are presented in Table 8.14 for the two periods of ana 1ys is. TABLE 8.14.Leve1ized Cost of Power for Lowered Heat Rates in Thermal Generation (mills/kWh) Improved Base Case Heat Rates 1981-1981-1981-1981- 2010 2050 2010 2050 Plan 1A 58 64 58 64 Plan 1B 58 59 58 59 Plan 2A 59 66 59 66 Plan 2B 58 61 58 61 Plan 3 59 65 58 64 Plan 4 59 66 56 63 As shown,these changes in the~ma1 efficiency make Plan 4 the lowest cost alternative over the shorter time period.However,the effects of these changes are relatively small.The longer-term ranking of plans is virtually una ff ec ted. 8.4.5 Impact of Using Fuel-Cell Combined-Cycle Generation Rather than Fuel-Cell Stations Because the number of alternative generating technologies that can be included in any single model run is limited,the fuel-cell combined-cycles 8.18 alternate was not included in Plan 4.To test their impact on the cost of power,the fuel-cell stations alternative was replaced with the fuel-cell combined-cycle alternative in one test.Although the fuel-cell combined-cycle had a higher capital cost than fuel-cell station,the combined-cycle operated more efficiently.The impact on the levelized cost of power of this sensitivity test is shown in Table 8.15 for the two periods of analysis. TABLE 8.15.Levelized Cost of Power for Using Fuel-Cell Combined-Cycle Units Rather than Fuel-Cell Stations -Plan 4 (mills/kWh) Fuel-Cell Base Case combined-Cr~i1981-1981-1981-- 2010 2050 2010 2050 Plan 1A ~64 ~64 Plan 1B ~59 ~59 Plar 2A 59 66 59 66 Plan 2B 58 61 58 61 Plan 3 59 65 59 65 Plan 4 59 66 61 69 As shown,the levelized cost of power increases if fuel-cell combined- cycle units are used.The increase in efficiency does not offset the increase in capital cost. 8.4.6 Impact of 50%Higher Fuel-Cell Station and Coal-Gasifier Combined-Cycle Capital Costs In general,the cost of emerging technologies such as fuel-cell stations and coal-gasifier combined-cycle have tended to be higher than initially estimated when they become commercially available.To test the impact of such possible increases,the capital cost of these alternatives was increased by 50%.Plan 3 includes coal-gasifier combined-cycle facilities and Plan 4 includes fuel-cell stations.The results of these tests are presented in Table 8.16 for the two periods of analysis. These capital cost increases raise the levelized cost of power by 1 to 2 mills in both time periods. 8.19 TABLE 8.16.Levelized Costs of Power for Increased Capital Cost of Fuel-Cell Stations and Coal-Gasifier Ccmbined-Cycle (mills/kWh) Increased Capital Cost Plan 1A Plan 1B Plan 2A Plan 2B Plan 3 Plan 4 Base 1981- 2010 58 58 59 58 59 59 Case 1981- 2050 64 59 66 61 65 66 58 58 59 58 61 59 64 58 66 61 67 67 8.4.7 Capital Cost of Chakachamna Hydroelectric -20%Lower and Higher than Estimated The Lake Chakachamna project is a relatively large hydroelectric project that would be located on the west side of Cook Inlet.It is a key alternative included in Plans 1A and 2A.As presented in Chapter 4,two cost estimates have recently been prepared on two different concepts of developing the project.As part of this study,a cost estimate was prepared for a project with a peak capacity of 480 MW.The total cost of this concept is $1.010 billion or $2104/kW.In another project being conducted for the Alaska Power Authority,a preliminary cost of $3860/kW was estimated for a 330-MW project (excluding transmission costs).The capacity in the 330-MW concept was reduced to allow minimum stream flow in the Chakachatna river to maintain the fish runs existing in the river.As mentioned earlier,he 330-MW project concept was used in this report since the 330-MW concept reflects more research concerning the possible environmental impacts of the projects. However,to test the impact of the lower capital cost estimate on the cost of power,a sensitivity test was run assuming that the total project cost was $1.010 billion for a capacity of 330-MW ($3060/kW).This estimate is ~21% lower than the Bechtel estimate for the same proJ_ct.Another sensitivity·test was performed by increasing the capital cost of the project by 20%.The results of these tests are shown in Table 8.17 for the two periods of analysis. 8.20 TABLE 8.17.Leve 1ized Cost of Power for Chakachamna,Capital Costs 20%Lower and Higher than Estimated (mills/kWh) Lower Higher Base Case Capital Cost Capital Cost 1981- 1981-1981- 1981- 1981- 1981- 2010 2050 2010 2050 2010 2050 Plan lA 58 64 57 62 59 65 Plan IB 58 59 58 59 58 59 Plan 2A 59 66 57 64 60 68 Plan 2B 58 61 58 61 58 61 Plan 3 59 65 59 65 59 65 Plan 4 59 66 59 66 59 66 The changes i'n the capital costs of the Chakachamna project have a relatively small impact on the cost of power over both time horizons.Little change occurs in the relative ranking of the plans in either the lower or higher capital cost te~t. 8.4.8 Use-of Healy Coal in the Anchorage Area The development of the Beluga coal field is uncertain at this time. Because development of this coal field is a key assumption in several electric energy plans,this uncertainty must be recognized and taken into account in the decision process.One possible alternative to using Beluga coal at minemouth plants is to transport coal from the Healy area,using the Alaska Railroad,to burn in coal steam-electric plants located in the greater Anchorage area.This option would be quite different in several ways from the concept of using Beluga coal at minemouth generating stations (e.g., environmental impact).In this sensitivity test the only difference is assumed to be the ~rice of coal.The price of coal for Anchorage in this case is assumed to be the price at Healy plus transportation costs to Anchorage. Sensitivity analyses were run for Plans lA and 3.The impacts of this assumption are shown in Table 8.18 for the two periods of analysis. As shown,this test indicates that the levelized cost of power would increase by 1 to 2 mills/kWh over the 1981-2010 period and by 1 to 3 mills/kWh over the longer time period. 8.21 TABLE 8.18.Levelized Cost of Power Assuming Healy Coal is Used in Anchorage Area Healy Coal Base Case in AnChOra§g 1981-1981-1981-1 1- 2010 2050 2010 2050 Plan lA 58 64 59 65 PI an IB 58 59 51l 59 Plan 2A 59 66 59 66 Plan 2B 58 61 58 61 Plan 3 59 65 61 68 Plan 4 59 66 59 66 8.4.9 Delay in Upper Susitna Project from 1993 to 1998 For large construction projects,such as the Upper Susitna,the possibility of delays always exists.To test the possible impact of delays on the cost of power,runs were made assuming that Watana does not come on-line until 1998.Devil Canyon was assumed not to come on-line within the time horizon.The effects of this delay for plans IB and 2B are presented in Table 8.19 for the two periods of analysis. TABLE 8.19.Levelized Cost of Power Assumi ng Watana Dam Delayed Until 1998 Delay Base Case in Watana 1981-1981-1981- 1981- 2010 2050 2010 2050 Pl an lA 58 64 58 64 Plan IB 58 59 59 64 Plan 2A 59 66 57 63 Plan 2B 58 61 58 63 Plan 3 59 65 59 65 Plan 4 59 66 59 66 Delaying the Upper Susitna project by 5 years has relatively little i~pact on the levelized cost of power over the 1981-2010 time period.The delay slightly increases the costs of power over the 1981-2050 time period. 8.22 8.5 EFFECTS ON ELECTRICITY DEMAND OF STATE SUBSIDIES TO COVER CAPITAL COSTS OF NEW GENERATING FACILITIES As discussed in the next chapter,the State of Alaska has the legal framework in place to provide subsidies and/or loans to finance electrical generation projects.If the State does not require market rate of return on these fUnds,the cost of power from projects financed this way would be lower than if capital costs were fully recovered.One possibly major impact of reduced costs of power ~uld be an increase in the demand for electricity.To get a general idea of the possible impacts of such programs,two sensitivity runs were done assuming that an extreme form of such a policy is implemented. In these sensitivity tests,the state was assumed to pay the capital costs for all new generating facilities and was assumed not to require any capital recovery in electric energy Plans 1A and lB.Only recovery of operating and maintenance costs were assumed to be required. The levelized cost of power and peak demand for the medium economic scenario and the no-capital-recovery assumption are presented in Table 8.2V. TABLE 8.20.Levelized Cost of Power and Peak Demand Assuming No Capital Recovery (mills/kWh) Medium Economic 2~2 2964 Peak Demand 2010 (MW) No-Capital- Cost Recovery 42 36 Levelized Cost of Power 1981-2010 Scenario Peak Demand 2010 (MW) 1260 1350 Levelized Cost of Power 1981-2010 ~ ~ Plan 1A Plan 1B As the table shows,the resulting very low price of power to the consumer causes large-scale fuel switching to electricity and few incentives to conserve in eXisting uses.Demand in the year 2010 in~reases by about 1.8 times in Plan 1A and by about 2.2 times in Plan 18.A greater increase occurs in Plan 1B because the costs of power from hydroelectric facilities consist almost entirely of capital charges that are now absorbed'by the State in these cases. The real financial resources the state must spend to generate the power in the no-capital-recovery case are higher than the 42 or 36 mills shown,although the consumer sees only the 42 or 36 mill charge.These real resource costs 8.23 most likely will be higher than the 58 mills in the unsubsidized case because demand is higher and will require that some higher cost generation be built. The State probably will not adopt a program of subsidizing all the capital costs of new generation facilities.However,these sensitivity tests indicate the State's influence over demand for electricity with capital subsidy policies.Less ambitious schemes requiring either repayment of the capital costs or some positive rate of return will tend to force the demand and prices in Table 8.20 toward the base case. 8.24 g.O CONSIDERATIONS FOR IMPLEMENTATING ELECTRIC ENERGY PLANS When ~his study was started,the intended purpose of this section of the report was to identify "institutional constraints"that might prevent implementation of any of the electric energy plans.This section also was to include recommendations for legislation that would facilitate implementation of a preferred electric energy plan.Howev~r,with the passage of Senate Bill 25 during the 1981 state legislative session,the approach was chJnged.SB 25 amended substantially the institutional framework previously in place and established a new set of standards that must be followed by the Alaska Power Authority (APA)before undertaking construction of a power generating facility. In this section the electric energy plans are evaluated in light of this legislation and the following subjects are discussed:1)a review of federal legislation to determine if any federal statutes are preventing the state from undertaking any of the electric energy plans;2)a brief review of the history of the planning and implementation of power generation,transmission and distribution in Alaska,with particular attention to the State's involvement in these areas;and 3)a review of the recently enacted state statute to determine if the electric energy plans can be implemented under it. 9.1 FEDERAL CONSTRAINTS No federal statutes,rules or regulations absolutely prohibit implementation of any of the alternatives discussed in this report.The closest thing to a federal constraint upon state implementation may be the Fuel Use and Power Plant Act (FUA)of 1978,which initially might be perceived as a bar to using natural gas for generating electricity in new power plants. However,a IBore extensive analysis indicates that FUA is not an absolute bar, but rather only a legal obstacle that must be negotiated if the State chooses to pursue a natural gas alternative such as Plan 4.This situation is true for several reasons.First,the general proscription against using natural gas has several exceptions.Most likely one or more of these exceptions will be applicable to power generation in Alaska and therefore FUA would not be the absolute constraint it appears to be.Second,FUA may be amended or repealed in the near future because of changing attitudes towards natural gas ~vai1abi1ity for power generation and the general effort to reduce regulation on the natural gas industry.If the FUA is not repealed or amended,and if 9.1 none of the exceptions ultimately could apply,FUA would be a bar to the natural gas alternative.However,the application for an exception must be developed and pursued before this situation can be determined. Certain environmental laws also could impose a constraint.For example, air-quality standards might prevent adoption of the increased coal-use alternative.Again,however,before this constraint can be determined a substantial amount of baseline data and engineering design work must be accomplished.At this stage in the analysis of that alternative,the more reasonable conclusion is that environmental standards can be met and that such standards do not pose a constraint that absolutely cannot be satisfied.Under special or unique circumstances,other environmental laws likewise could prevent implementation of a particular option.For example,dam construction was halted on a major hydro project in Tennessee following the discovery of a species of fish protected by the Endangered Species Act.However,complete and detailed studies must be completed before such unique events can be predicted to preclude one or more of the alternatives. 9.2 A HISTORICAL PERSPECTIVE OF POWER PLANNING IN ALASKA In Alaska,state involvement in planning and directly providing generating capacity and transmission facilities is a new undertaking.Prior to 1976, planning and construction of facilities were performed either by the individual municipal ~r cooperative utility.or by various federal government agencies. For example,the Alaska Power Administration (now within the U.S.Department of Energy)has owned and operated the Eklutna Hydroelectric project since 1995. Chugach Electric Association has planned and assumed responsibility for both constructing hydroelectric projects such as Cooper Lake (1961)and installing gas-fired generating capacity,~s well as the transmission and distribution systems associated with these projects.Other local utilities also assumed responsibility for constructing facilities and conducting various feasibility studies.Federal agencies also undertook a variety of feasibility and planning studies. Lack of direct state involvement in the first fifteen years after statehood can be explained by several factors.Perhaps most significantly is that little need for such involvement was perceived.Another major factor was that the local utilities were able to plan and manage the projects they required.Furthermore,federal funds were available and state funds were not. 9.2 In the mid-seventies,however,these factors began to give way to other forces.Estimated project costs escalated significantly because of inflation, government regulation,and the expected growth in demand,which implied bigger facilities.Additionally,state revenues were rising.In 1976 these forces resulted in passage of a bill creating the Alaska Power Authority.The legislative findings and declaration of purpose in the enabling legislation reveal the broad purposes and objectives that the legislation sought to address. Legislative Finding and Policy (a)The legislature finds,determines and declares that (1)there exist numerous potential hydroelectric and fossil fuel generating sites in the state; (2)the establishment of power projects at these sites is necessary to supply lower cost power to the state's municipal electric,rural electric,cooperative electric, and private electric utilities,and regional electric authorities,and thereby to the consumers of the state,as well as to supply existing or future industrial needs; (3)the achievement of the goals of lower consumer power costs and long-term economic growth and of establishing, operating and development power projects in the state will be accelerated and facilitated by the creation of an instrumentality of the state with powers to incur for constructing,and with powers to operate,power projects. (b)It is declared to be the policy of the state,in the interests of promoting the general welfare of all the people of the state, and public purposes,to reduce consumer power costs and otherwise to encourage the long-term economic growth of the state,including the development of its natural resources, through the establishment of power projects by creating the public corporation with powers,duties and fur~tions as provided in this chapter. To accomplish its objectives the Power Authority was given broad powers, including the power to issue bonds,to enter into contracts for the construction,acquisition,operation and maintenance of power projects,and to transmit and sell such power.It was also authorized to conduct feasibility studies for hydroelectric and fossil fUel power generating projects. The same legislation that cl'eated the Power Authority also created the Power Project Revolving Loan fund.The Power Authority administered this fund, which was set up as a "trust fund"to mu~~loans to municipal or public 9.3 utilities for feasibility studies,pr.econstruction engineering and design,and construction of hydroelectric and fossil fuel plants.For example,in 1977 il.6 million was appropriated for the Green Lake Hydroelectric project at Sitka and i540,OOO was appropriated to the Power Project RevolVing Loan Fund. 7hrough the fund,loans also could be made to cities,boroughs,village corporations,village councils and nonprofit marketing cooperatives for meeting their "energy requirements." In 1978 the legislature significantly amended its 1976 legislation.The findings were changed to state that the legislature's policy was to foster power projects to supp ly power at "the lowest reasonab le cost • •.,"whereas the earlier findings had referred only to "lower cost"power.The provision relating to pricing of power was amended to make certain that the prices at which power was sold covered the "full cost of the electricity and services ••." In 1978 the legislature also adopted resoiutions approving the sale of i300,OOO,OOO in revenue bonds for constructing a coal-fired electric generating plant at Healy and authorizing the Power Authority to incur indebtedness (i25,OOO,OOOl for Phase I studies for the Susitna Hydroelectric Project. Additionally,the state Senate adopted a resolution directing its Special Committee on the Permanent Fund to investigate the use of money from the permanent fund as a source of revenues for financing hydroelectric projects. In 1979 the legislature adopted two resolutions related to power.One asked the Army Corps of Engineers to use funds from the Small Hydroelectric Plants program to investigate the feasibility of small-scale hydroelectric projects in rural Alaska as an alternative to the high cost of deisel-generated electricity.The other resolution approved issuance of i120 million in revenue bonds for the Terror Lake Hydroelectric project and i20 million for the Solomon Gulch project. The 1980 session of the legislature passed substantial legislation relating to the Power Authority.Approximately ~50 million was appropriated for some 35 projects.The major appropriations were ~15 million for the Tyee Lake project at Wrangell and an S18 million loan for the Swan Lake project.Most other projects received funds ranging from ~40,OOO to i2 million. In addition to these direct appropriations,two resolutions authorized the issuance of a variety of revenue bonds.The revenues from those bonds would be 9.4 us~for constructing or acqulrlng generating facilities or for financing expansion of distributions systems by local utilities.The revenues used included the following: •~70 million toward construction of the Tyee lake project •~120 million for the Swan lake project •~110 million for waste heat power generation facilities to be constructed by Golden Valley Electric Association •~15 million to finance the lake Elva (Dillingham)project •S30 million for the Bear lake project (Prince of Wales Island) •lesser amounts for Homer Electric Association,Naknek Electric Association,Matanuska Electric Association,r.lacier Highway Electric Association and Cordova Electric Association. In addition to this legislation relating to funding,two bills were passed that again amended sUbstantially the legislation creating the Power Authority.The first bill was a major piece of legislation on the general subject of energy.One part of this bill contained the provisions relating to amendment of the Power Authority statute.These amendments gave the Power Authority the power to recommend power project financing through the use of general obligation bonds--a financing approach that earlier legislation had not contemplated.This bill also amended substantially the provisions creating the Power Project Revolving loan Fund,.One change converted the fund from a.. revolving loan fund to a direct Uoan program,with funds for loans appropriated by the legislature to the fund and revenues from repayment deposited in the state's General Fund rather thar in the Power Project Fund.The purposes for which loans could be granted we~e expanded.A provision that permitted the Power Authority to make unsecured loans in some instances also was added.The right to forgive loans was transferred from the ~ower Authority to the legislature itself. A new section was added requlrlng the Authority to undertake reconnaissance studies to identify power alternatives for communities.Under this addition reconnaissance studies must be reviewed by the Division of BUdget and Management and submitted to the legislature.The Susitna Hydroelectric project was addressed directly in subsequent 1980 legislation. 9.5 legislature again passed electric power legislation,known as The legislation,discussed in Section 9.3,relates to the In 1981 the SB 25 and SB 26. .?ower Authority. The above discussion is not intended as either a comprehensive review of history of electrical power planning and development in the State of Alaska or a detailed review of the legislation relating to the Power Authority. Nonetheless,several relevant observations can be drawn.First,involvement by legislative and executive branches of the state government in the planning, analysis,financing,and direct ownership of power generation and distribution facilities is a recent phenomenon.Second,although recently involved,the State has clearly assumed a major role in these activities.It has preempted significantly most other efforts by federal agencies and by individual utilities.Third,almost yearly the state's involvement has been expanding significantly,in terms of dollar volume,complexity,and geographic area. Fourth,the specific means and parameters that define that involvement have changed frequent ly. These observations suggest th-t the analysis of the 1981 legislation and its impact upon alternative energy projects,which follows,must be viewed with some skepticism.Most likely,these laws will be changed before either the Susitna Project or some alternative can be implemented.Furthermore,because the State's involvement has been so fluid,if an alternative is perceived publicly as preferable to the Susitna Project,the alternative most likely could be implemented directly by changes in the current statutes. Federal,state,or local governments have become involved in the constr1lction and ownership of power generating faci lities for four general reasons.First,government involvement in the decision making process and ownership of production facilities may be appropriate where market imperfections prevent a utility from bUilding the generating capacity it needs to meet demand.Such imperfections do exist in the capital markets and also may be caused by regulatory risks.Tu address such imperfections,the simplest approach is for the government to make available to the utility a grant or loan to provide a direct source of capital.Normally,the government entity would not have to take over the decision making process or own the facility simply to correct capital market imperfections. A second reason for government involvement is to give recognition to "externalities"that result in public benefits but "'iGil Ire not factored into 9.6 an individual utility's decision making process.Many projects undertakpn by the federal government are justified on this basis.For example,construction of Tennessee Valley Authority dams was undertaken when public sentiment viewed the creation of construction jobs as a public benefit in itself.In this instance,the government was willing to spend money to put people to work on a construction project even if a private entity was not willing to build the project.For dams built in the West,the externalities that constitute public benefits justifying the exp~nditure of public dollars include making water available for irrigation and for protection against flooding.Although a private utility might not chose construction of a hydroelectric plant if cheaper energy sources are available,the hydroelectric plant may be the "best" plant when consideration is given to the additional public benefits it creates. A third reason for government involvement is the decision to effect income transfers through the distribution and consumption of power.If the government wishes to subsidize the consumption of power,it may construct a plant and sell the power below its free market price.The result will be a subsidy to electricity users.Such a subsidy can result-in income transfer either to end- use consumers,to the utility distribution companies,or to both. A fourth reason for government intervention in the decision making or production production process is simply to alter the free market result for political or policy reasons.Thus,if a private utility will generate electricity using methods "A"and "B"and the government prefers methods "C" and "0",it can intervene to ensure use of methods "C"and "0."The government's preference for "C"and "0"might result from objectives already discussed (such as income redistribution)or it might be the result of noneconomic objective.For one example,a noneconomic objective might be the desire to create a local market for coal.If this were a government objective, the government might wish to encourage coal-fired power generation even if that method was not the least-cost method. 9.3 THE CURRENT STATUTORY FRAMEWORK IN ALASKA The legal authority for the state to implement the electric energy ~lans is contained in the recently adopted legislation that revises the legislation creating the Alaska Power Authority.The provisions creating the Alaskan Energy Program,A.S.44.83.380 et seq (S8 25),are especially important.This statute creates a fund,the revenues of which may be used for,among other 9.7 things,reconnaisance,feasibility and construction of power projects (including all related costs of such construction).The fund may not be used for operation and maintenance which,as discussed below,creates a significant bias in planning.Before the revenues can be used for constructing a project, the project must satisfy the following conditions: 1.The projEct must be economically feasible and after construction, must be able to provide revenue sufficient to return annually to the State five percent (5%)of the amount that the Power Authority has spent from the fund for the project. 2.The project must provide the lowest reasonable power cost to the utility in the market area for the estimated life of the power project,whether operated by itself or in conjunction with other power projects in the market area. 3.The project must operate either on renewable energy resources such as hydroelectric,wind,biomass,geothermal,tidal,solar,temperature differentials of the ocean,or coal,peat,waste heat,or fossil fuel. 4.The project must be approved by the legislature and funds appropriated by the legislature. Because these limitations are defined primarily in economic and political terms and not in terms of engineering or hardware,the statute appears to have enough flexibility to permit the Power Authority to adopt an)of the four alternative electric energy plans,provided that the plan meets the tests of the statute.The exception to this conclusion is the plan option that requires large expenditures for conservation of electrical energy.The statute appears to contemplate construction of facilities that will generate electricity.The statute may be interpreted so that certain types of conservation programs could be classified as "projects;"however,this approach is doubtful. Implementating the conservation option appears to require new authorizing legislation. Although the requirements of A.S.44.83.384 et ~.do not preclude implementing any of the energy option plans (except perhaps conservation as mentioned above),the circumstances under which the requirements dictate a particular option as the only authorized option cannolbe detenatned with .------------~_-................ certainty.Lack of certainty results because the requirements are too general and sometimes contradictory to judge definitively how the courts will interpret the statute. The relationship between the requirements set forth in A.S.44.83.384 (conditions 1-3 above)and the requirement of legislative approval contained in A.S.44.83.380 is not clear.Legislative approval appears to be a separate, independent requirement and therefore should not be sufficient to authorize construction of a project that does not also satisfy the requirements of A.S.44.83.38(.On the other hand,the legislative approval must be in accordance with A.S.44.83.185,which requires passage of a law authorizing the project.Most likely the legislation authorizing approval will either make explicit or implied amendments,or if necessary,repeal the requ1rements of A.S.44.83.384 as to the project the legislation authorizes.If the legislature takes this action,then any of the options are possible if it is approved by enactment of a law.While this analysis seems logical,it renders the requirements of A.S.44.83.384 illusory,and for that reason,a court might conclude that a project is not properly before the legislature for approval until the requirements of A.S.44.83.384 are met. Application of the standards set forth in the statues requires interpretation by the Power Authority.For example,the requirement that a project "be able to provide revenue sufficient to return annually to the State five percent (5%)of the amount that the (Power Authority)has spent from the fund •••"is ambiguous.If this requi.rement is interpreted to rm:an that a project must return five percent (5%)of the amount spent,almost no project could qualify because the price the Power Authority charges for power pursuant to section .490 expressly excludes capital recovery.This provision must mean that five percent (5%)would be returned if a full price is charged.However, even this interpretation raises questions.What pr·ice and demand assumptions should be made to determine if the project meets the requirement?Is it realistic that a project large enough to meet demand at a low price will also be able to sell enough power at a much higher price to return five percent (5%) per year?What rate of return should be assumed for invested capital?Also, if the State has a 100%equity position in the project,this requirement necessarily implies a 20-year amortization of the project. The statute requires that a project must provide the lowest price by itself and when operated in conjunction with other Dower projects in the market area.However,a project may be lowest in only one situation,not both.All 9.9 of these uncertainties are problems that are frequently encountered and handled by planners and engineers when making decisions about future generating additions.Once assumptions are made about market area,future demand,project .!llfetime and other parameters,conclusions can be drawn about which project will provide the "lowest"cost.In the current statute uncertainty exists, however,because it authorizes projects only when certain criteria,such as "lowest cost,"are met.It does not prov i de gu i dance on the assumpt ions that are to be used when arriving at the final determination. Because the statutory requirements are technical and require the Power Authority in determining whether they are met,its determination should be final unless a court finds that no reasonable basis exists for the their finding.This standard maximizes the Power Authority's fleXibility to evaluate alternatives,but does not give the Power Authority complete freedom to select whatever option it wants.If the option or base case is not justified in terms of the statutory requirements,interpreted in a reasonable man~er,the option or base case could not be implemented under the existing statute. In the statute,other provisions that seemingly are unrelated to the statutory standards create bias in favor of a particular generation option. Because the Power Authority obtains the needed funds for a project from the legislature and because the project is expected to be subsidized part;ally with General Fund revenues,no direct market accountability exists for whatever option the Power Authority undertakes.On the other hand,the Power Authority, as an agency 01 the state,must be accountable to the legislature,the governor and the people of the state and,to the extent this political accountability is a direct substitute for market accountability,the Power Authority can be expected to seek out the least-cost approach just as a private utility would. Conversely,if the least-cost objective conflicts with other political objectives,the Power Authority may seek to accommodate both the economic and political goals to the maximum extent feasible. Section .490(b)(2)of SB 25 states that if the legislature has not appropriated ~5 billion to the fund,the wholesale power rate shall be the higher of either 10%of the amount the Power Authority has invested in power projects or the amount of revenues necessary to pay operation and maintenance· (o&M)costs plus debt service plus safety inspections.If O&M costs,debt service and safety inspections are less than 10%of investment,which is quite likely.then pijrchasing utilities will want the legislature to appropriate the 9.10 )5 billion to satisfy the condition contained in (b)(2)since they then will avoid the risk of the higher wholesale power costs.To meet the $5 billion appropriation requirement,the legislature will have to select those power projects and energy options that ~ave the greatest initial capital cost.Of the option plans identified in this study,only those including construction of Susitna appear to meet that requirement.The purchasing utilities can be expected to work aggressively,in their own self interest,to persuade the Power Authority to choose an energy option that includes construction of Susitna,even if Susitna is not the least-cost approach. The pricing provision also creates a second kind of bias.Assuming the legislature does appropriate $5 billion,the wholesale price the Power Authority charges to purchasers is a function of o&M costs,safety inspections and the financing approach used by the Power Authority.Under this provision, the price to the purchasing utilities will be lowest for those projects having lowest O&M and safety inspection costs,regardless of capital cost,when the project is funded by direct appropriation.If the least-cost approach is one that includes projects with higher overall long-term o&M costs but less initial capital investment,the least-cost approch will not be favored by the purchasing utilities because it results in greater power costs to them (and less cost to the State).This bias in favor of the facility with the lowest r&M is significant when considering alternatives.Those facilities,such as hydroelectric projects,with high initial capital investment but low O&M costs, will be favored by purchasing utilities because the capital costs are subsidized by the State but o&M costs are not.On the other hand,projects, such coal-fired plants,which have lower front end costs but higher o&M costs,might be the least-cost project (in present dollars)but will not be favored by the purchasing utilities because it could result in higher cost power to them and to their customers because the State subsidy will be less. The extent to which the statute's pricing provisions create,for the purchasing utilities,objectives that conflict with the criteria contained in other parts of the statute cannot be known until additional economic analyses of the options are undertaken.Likewise,the extent to which the Power Authority's analysis will be directly or indirectly inflenced by the desires of purchasing utilities is unknown.Note that the Power Authority is required to average prices statewide for all projects.This requirement means that all purchasing utilities,not just Railbelt utilities,will be impacted by the 9.11 Power Authority's decisions.All utilities which do.or may.purchase power from the Power Authority's.therefore.will have the same objectives of prefering those projects that receive maximum StJte subsidy whether they purchase power from a particular project or not. 9.12 APPENDIX A DEMAND ASSUMPTIONS AND FORECASTS APPENDIX A DEMAND ASSUMPTIONS AND FORECASTS Th is append b conta ins tab les sunmariz ing e lectr ica 1 demand assumptions and results for the three Railbelt load centers -Anchorage and vicinity, Fairbanks and vicinity,and Glennallen-Valdez.The demand totals include only utility-provided energy at the consumer level.Military consumption,self- supplied industrial electricity,and residential and commercial consumption of electrical power by small users not connected to utilities are excluded.Line losses and spinning reserve requirements are considered part of supply requirements,but are not shown as part of demand. The appendix is orga~ized as follows.Table A.l summarizes the assumptions used to generate forecasts of the Railbelt's economy and population for use in the MAP model.Table A.2 summarizes the assumptions used in the study for large industrial demand.Tables A.3 through A.ll show the forecasts of total employment and population for each load center used throughout the study.Tables A.12 through A.37 show total energy and peak demand forecasts for each load center for each combination of economic growth and supply plan analyzed in the study.(al Finally,Tables A.38 to A.49 summarize the impact of 1%and 3%growth in fossil-fuel prices above inflation as a sensitivity test of the base case fuel escalation rate of 2%. {al The sum of peak demands for the three load centers will exceed that for the Railbelt because the peak loads are assumed not to coincide.A diversity factor of .9n is multiplied times the sum of the load center peak demands to derive Railbelt peak demand. A.l .•~.•~.:: •z •z ·•~ i•w :•f •z•z .:: •z .:: .:: VIc::o +'a.e :::l VI VI <C ·••j ~ ~ j i ~ j J A.2 TABLE A.1.(contd) ln4llstrr 'roJl!Ct(s)Ass_t1on low (ne(')Modtrlte cu.(bl High C,ne(t)l"'slrl.llutlm Cue(d)~rtIl'"Cu,.frl Agrlcu1ture ,..tous levels of 'i 1011 dec Itne [.,.lo~t 9"'owth Mtjor '!Jf"t-[lIP lo~t grnwt,h ,t "'.lor "grlcu1 •deftlo~t depending tn ecllvlty ..t ~annu,l r.te cultru.l 8i .nnu,1 rllte culturalonStile"Federtl devl!!l~ts;Itevel.etllSi po1tct6.c_'ned 161 ,Mu.1 161 ..nnual with ...kltl conditions growth qrDWth ftsherlrs Constant .,lo)'Hftt In No develop-SOl repltce-enl 1001 replace-rm repllr.Mtnl lorn::r"!,,IOKI!!_ exlsllng flShlrt;.....,....,...., oevel~t of He- fishing to rep1ICt forelr;(tshint In 200 .1ne 1.1t WlTtes. all,Gas Ind Tr""s-AllSh Plpeltne CanstroctlUl of 4 .ddt-'es Ye.,..,..YIlS Mlntng lll)nll pulIPtng stattOI'lS Mort'-5t Gas ,tpellne Constrll:tlon of "'tunl ,..Ye.,..'es ,.. 9's plpeltne fr. Prudhoe lillY ,nd .sso- chted facilities 1983-81 Prudhoe lI.y 011 _d Production f ...e.lst.,..,..,..y~~'"G..'"9 .:Ml newly duel- >oped 'fIelds resulUng.tn trr.reilSed pe ....nent....,10)'Mnt Upper Cook Inlet Decllnlng ...,lo.,..t ,..hs 'es ,..,.. Ot I 1M GIS In 011 productlon 0"· set by eIIIl1o)'lfflt 9"o~lh In 9i1S produc t Ion ...tlon.l"tr01_DevelQSlll!flt ,product-£lplontlon 51 ...hpld 51 ...Rlpld Reserve In Ahskl ion frat 5 otl fields but 1'10 dewel-dewl!lop1ent oewe1~t dewelo~t ""Yl!lo~nt Ifld construction of ...., of 525 ."n of plpe- 11 .. Outer Contlnentll hplont lon,eMvel·Relllhll"t Sl!I ]lelSe ules 7 l~ul!ules ]lelSe ules 7 11"uI!ules SM 1f IOCS)pelro-...t ,production produc t Inn;Ifter 1985;IHer 1985;.H~J9M;Ifter Ifl,'l"i; 1_Ifld 941'bued on currenl OCS no ules 7 bl11ton bbl 17 billion bbl 7 bOlton lIbl 17 hllltt'Ol'l hhl luse schedu1e wUh .Utr 1985;I discovered ,discovered ,dtscoverl!ft ..dhc{OyerMt &. addition.)ullS billion bbl Itl!ye)nptd deyeioped developed rtevel~ ,Uer 1985 dhcovered COIl Devel~t Devel~l of I.lug.o.Evenlu,l pro·Eventu.l pro-E't~lu.l pro·[YfOntUill pro- C00l1 reunes for dl.K:tlon of 4.4 due t I(WI or 11 tltc:tlan of 4.4 l"uCtlOfl "f II eJlPOl"t _d onfuel .lIltan tons .llllon ton'.llllan tnns .,111M tn,,\ production per yelr per yur per ye.r Pf'rynr TABLE A.l.(contd) TourlSll St.le Goverllr.lfnl(f)_,~......wlth Per Clplh fler (.plta Per caplt,Per Cllp1 t.spend I ng Per capita popullt on,prices spending spendtng In-spending ln~tncrfllsn .t S~sperullnq In- Ind tnca-et unch.nged cruses .t crtUfts .t r.te lIS PI""caplh creues at s-.e nte IS per s-e r.te IS t""...s..e rate IS Clpth 11tC~per Clpltl ptlr c.pl ta,""...,""..... AMUll growth r.te o(2l 'X 6X '"OX tourtUl MIl1o~t >• 1 '1 Kls go·95i pl"Oblblltty th,t actu.'deYel~ts wtl1 equal or flllCl!ed this projrctton b Hn 50i pl"Obilbtllty th.t .clual develot-ents wtll equal or fllCted this proJt.Cllon c HIS 5-1Oi problbtlily th.t actu.l devel~nh will p.qu.l or 4!llceec!thls projection d s...s ItOderate cue wllh .<ktltlon or •serles of lnOOslrl'l deW!loplIents:1)pelrochealcal develoPlllf!'lt.s;21 ,IUllI,..:31 synfUf!1s:aM 4\Inc.1 -.auhclurlng It!S_as hi'"cue plus:1)petroche.lcel:2)synfuels:3).1..looa;and .)IOClllNllufaclurlng. f In 1M u",usl,lnlble spemlng clSe,pCwat.e sector assu.ptlons In the IlOderatl!case are Nlntalned.litate Rf'wenlH's are r~uc:ed to the l"v..ls orMlctf"01 In October 1981 by the [)epart.ent of venue.Operating expenditures grow by the Sll.rule as In thl!mdl!rate CllSe.Capital f'xpf!ndll\u'u arl'IISo;l,IlIlII"It to eqUil 901 of the aca-uhted General Fund ba1ence In the 1980's,l!qll~'llng $5 hllHon per year b.'I'199().Operatl"Q and CllpH,l eXPl'ntllturi'~Irf!Ih"....• after ll.lted by the ellhllJstlon of the Gener.l fund balances "11th the dl'Cllnl!In 011 rUf.fIUf!S.~fte ..1997,cllpHal ellpf!ndllurn a..e flnllntl'll lit II reduced level of $200 .tlUon per ye.r,entirely out of borrowing. Sources:M.J.Scott 1981.Al.ska Econc.lc Scenarios Review DocUMent,~t Draft Working Piper fto.1.1,Battelle Pacific NnrfhwP.$t lIM..lltn ..ll's. Rtchlam W.shlngton aM toldSllllh ana Porter.1961. TABLE A.2.Large Industrial Additional Sales and Peak Demand Archora" Medium EcorIOIlltc Scenario (/'fII) Glennallen-Valdez proba611Y .25 .JS pro6a61 THy .is.15 .s .s Forecast Pelk Sales peii SlIM Pe«1C sales peak sal l!'S Peak sales Peak safes Yeo...!!L ...!!!!L...!!L ~...!!!......!!!!L...!!L ~-!!!-~...!L ...!!!!L. 1990 0 0 0 0 0 0 0 0 7.75 33.05 15.5 66.1 1!l95 5 43.8 13.5 118.25 i!2 196.7 0 0 7.75 33.05 15.5 66.1 Ace,l erated I nOlstrr1al DeveloJ!ltnt EconClllte Scenario (1M) 1990 0 0 125 1095 2SO 2190 0 0 7.75 33.05 15.5 66.1 1995 245 2103.8 428.5 3699.7S 1612 527J.7 m 2146 252.75 2179.05 260.5 2212.1 Him Econa.1c $cenar-10 Olt) 1990 0 0 0 0 0 0 75 648 82.75 681.05 90.5 714.1 1!l95 5 43.8 13.5 118.25 22 196.7 75 648 82.75 681.05 90.5 714.1 Superhtgh EconClll1c Sclmlr10 (SH) 1990 0 ·0 125 1095 250 2190 75 648 82.75 681.05 90.5 714.1 1995 245 210J..8 428.5 3689.75 612 5273.7 320 2194 327.75 2827.OS 335.5 2S60.1 Note:Fairbanks has zero large project ~and in all cases.low scenario has zero lar9@ project _and for all Irus. ~f1!JUoes fOlf'1980 and 1985 are zero,whereas the 1995-2010 ntIlIlbers will l"'eIIafn at the 1995 l~e1. "'ble A.3.Population and Total.&Dployment, MediID scenario Without Susitna Anchorage-Fairbanks-Glennallen-Total O'X*Inlet Tanana vall c:i Valdez Railbfl t ....Ie.1r ~lbilL.~lmlL.~lmlL.~lmlL. 1980 218564 93936 58m 23300 8100 2691 285335 119927 1985 264424 111549 75785 29125 12539 4271 352748 144945 1990 306886 141999 77969 35761 13144 4601 397999 182361 1995 335010 144150 83911 35446 14430 4699 433351 184295 2000 374779 154970 92804 38016 16103 5038 483686 198024 2005 398115 171546 99351 42168 17112 5547 514578 219261 2010 417505 182616 103957 44775 17957 5917 539419 233308 Table A.4.Population and Total.&Dployment, Low scenario Without Susitna Anchorage-Fairbanks-Glennallm-Total. Cmk Inlet TaMM Val J e:i Valdez Rai1hfeJt ....Ie.1r ~lmlL.~lmlL.~lmlL.~lmlL. 1980 218913 93645 58926 23292 8095 2677 285934 119614 1985 253808 106713 75945 28368 9340 3093-339093 138174 1990 282101 126751 74100 32087 10581 3554 366782 162392 1995 292968 120373 76736 30001 11103 3448 380807 153822 2000 312575 124693 81012 31000 11776 3563 405363 159256 2005 327848 132422 84521 32763 12414 3742 424783 168927 2010 346001 138286 88557 34108 13114 3888 447672 176282 'DIble AsS.Population and Total.&Dployment, High scenario Without Susitna Anchorage-Fairbanks-Glennallen-Total Cook Inlet TaMM VallCf Valdez Rajlbf1 t _YeAr ~lmlL.~lmlL.~lmlL.~lmlL. 1980 218482 94426 58530 23376 8101 2705 285113 120507 1985 275788 116910 76292 30118 17320 4765 369400 151793 1990 358872 170476 86056 41773 22016 11084 466944 225333 1995 413988 187994 99293 45880 24579 8762 537860 242636 2000 491123 213168 117976 52706 27843 9565 636942 275439 2005 572944 245945 138009 61841 31339 10610 742292 318396 2010 672846 276694 162136 70357 35307 11523 870289 358574 A.6 Toble A.6.POpulation and Total EmployDEllt, Medi.1ID Soenario With SUsitnll Anchor~Fairbllnks-GlEmlilllen-Total rook Inlet TaMna VOlley Valdez Railhelt ~~~~~~~~~ 1980 218564 93936 58671 23300 8100 2691 285335 119927 1985 268115 112075 75237 29144 12442 4273 355794 145492 1990 336799 152550 75677 36487 12679 4673 425155 193710 1995 354350 158774 84271 37129 14386 4848 453007 200751 2000 383049 162458 94050 39021 16272 5123 493371 206602 2005 420595 174255 103938 42683 18290 5589 542823 222527 2010 457904 187409 115608 44795 20667 5905 594179 238109 Table A.7.POpulation and Total EmployDEllt, Law scenario With SUsitna Anchorage-Fairbanks-GlEmlilllen-Total Cook Inlet TaMna YAlla Valdez Roi1te1t ~~~~~~~~~ 1980 218913 93645 58926 23292 8095 2677 285934 119614 1985 257584 107220 75319 28380 9262 3095 342165 138695 1990 311233 136526 70789 32533 10092 3599 392114 172658 1995 311340 133516 76471 31243 11023 3553 398834 168312 2000 320716 131421 82209 31813 11942 3634 414867 166868 2005 327736 135274 87859 33340 12883 3794 428478 172408 2010 334379 140248 94485 34308 13973 3905 442837 178461 'DIble A.8.POpulation and Total EmployDEllt, High Soenario With SUsitna Anchor~Fairbanks-GlEmlilllen-Total OXtk Inlet TanoM Vol]flY valdez Ba1lbe't ....I=r ~~~~~~~~ 1980 218482 94426 58530 23376 8101 2705 285113 120507 1985 279346 117445 75807 .30141 17194 4767 372347 152353 1990 388802 181253 84987 44599 21378 11134 495167 236986 1995 435592 204841 100815 48258 24606 8982 561013 262081 2000 502335 223123 120081 54431 28166 9727 650582 287281 2005 571444 250680 142268 62943 32275 10715 745987 324338 2010 651904 281415 169023 70828 37000 11579 857927 363822 A.7 Tieb1e A.9.Population and Total ElIIployment, Ncnsustainable GoI7emment Spmding Anchorage-Fairbanks-Glennallen-Total Cook Inlet TanaM vall ev Valdez Rai1ht::1t ....Ieilr b...-a..J:gg...-a..J:gg...-a..J:gg...-a.. 1980 218564 93936 58671 23300 8100 26!>1 285335 119927 1985 272705 112411 77518 29461 12578 4310 362801 146182 1990 351654 166786 88789 42359 14008 5038 454451 214183 1995 353143 169272 88122 42006 15060 5235 456325 216513 2000 350448 155396 85749 37977 15430 5087 451627 198460 2005 313275 144939 74838 34508 14930 4846 403043 184293 2010 282679 132255 65793 30903 14335 4727 362807 167885 / "'abJe A"lQ.Population and Total ElIIployDEl'lt, IOOustrializatiOll scenario Anchorage-Fairbanks-Glennallen-Total 0Dk Inlet TaMM Valla Valdez Raj 1 hpl t ....Isr .I1mla..-a...I1mla..-a...I1mla..-a...I1mla..-a.. 1980 218614 94048 58714 23350 8092 2691 285420 120089 1985 267427 114146 77072 29754 17311 4649 361810 148549· 1990 324973 153733 82221 40113 24106 10556 431300 204402 1995 363129 160189 90410 40192 26178 8887 479717 209268 2000 417435 175196 104453 44083 27944 9518 549832 228797 2005 469011 199128 116505 51006 30279 10122 615795 260256 2010 531132 216564 131586 55259 32651 10660 695369 282483 TilbJ e A.ll.Population and Total &npJ.oyDEI'It, SUperhigh Eoonanic scenario Anchorage-Fairbllnks-Glennallen-Total Cook Inlet TanaM Villa VAldez Rajlhp1t ....Ieilr .I1mla.~.I1mla..-a...I1mla..-a...I1mla.BagL. 1980 218510 94489 58554 23405 8097 2705 285161 120599 1985 276860 117489 76731 30360 17287 4767 370878 152616 1990 366002 173773 88100 44749 24533 11100 478635 229622 1995 433643 197457 103946 48936 27649 9891 565238 256284 2000 524260 227754 127396 57274 30961 10985 682617 296013 2005 623899 268112 149238 69247 33837 12103 806974 349462 2010 747245 307620 178311 80468 37241 12851 962797 400939 A.8 ./ Table A.12.Feak Demand and Amual Energy, Medillll Eoonanic scenario,Plan lA Anchorage-Fairbanks-GlennallEn-Total rook Inlet TaoaM Valley Valdez Railbelt Feak sales Feak sales Feak sales Peak sales ~mil.~mil.~mil.~.!!til.~ 1980 415 2026 113 487 9 39 521 2551 1985 496 2424 155 665 10 47 643 3136 1990 616 3009 269 1155 21 93 880 4256 1995 728 3608 270 1157 25 110 993 4875 2000 811 4011 208 893 29 130 1017 5033 2005 906 4477 185 793 34 151 1092 5421 2010 1073 5288 185 794 39 175 1259 6258 Table A.13.Peak Demand and Amual Energy. Medillll Eoonanic scenario,Plan IB Anchorage-Fairbanks-GlennallEn-Total Cook Inlet Tanona yo]1 flY valdez Boilbelt Peak sales Peak sales Feak sales Peak sales lim .!!til.~.!!til.~.!!til.~.!!til.~ 1980 415 2026 113 487 9 39 521 2551 1985 502 2450 154 662 10 47 647 3160 1990 667 3254 265 1136 21 92 924 4482 1995 737 3651 264 1133 25 110 996 4894 2000 760 3763 195 835 29 130 955 4728 2005 888 4387 183 786 34 155 1073 5327 2010 1140 5617 206 883 41 186 1347 6686 1>bl e A.14.Peak Demand and Amual Energy. MediID Eoonanic scenario,Plan 2A Anchorage-Fairbllnks-GlennallEn-Total Cook Inlet TaMM Valley Valdez Bai 1 bel t Peak sales Feak sales Feak sales Peak sales lim .!!til.~mil.~.!!til.~.!!til.~ 1980 415 2026 113 487 9 39 521 2551 1985 437 2075 143 605 10 46 573 2726 1990 532 2522 262 1121 21 92 791 3734 1995 672 3287 264 1134 25 110 933 4530 2000 724 3533 196 841 29 130 921 4503 2005 802 3909 173 742 34 151 979 4802 2010 946 4604 173 744 39 175 1125 5523 A.9 Table A.IS.Peak Demand and Amual Energy. Medi\lll Eoonanic SCenario,Plan 2B Anchora~Fairbanks-GlE!ll'lil11en-Total Cook Inlet Tanana Vall ex yalQez Bai1telt Peak sales Peak sales Peak sales Peak sales :xe.u l!m ..UJihl...!!til...UJihl...!!til.~..!!til.~ 1980 415 2026 113 487 9 39 521 2551 19115 442 2099 142 602 10 46 577 2746 1990 579 2741 258 1105 21 91 832 3937 1995 703 3438 267 1144 25 110 966 4692 2000 735 3590 200 857 29 130 936 4576 2005 848 4130 187 800 34 155 1038 5085 2010 1041 5056 201 860 41 185 1245 6101 Tabl e A.16 •Peak Demand and Amual Energy. Medi\lll Eoonanic SCenario.Plan 3 Anchor~Fairbilnks-GlE!ll'lil11en-Total Cook Inlet Tanana ya]1 cy Valdez Boi 1 tel t Peak sales Peak sales Peak sales Peak sales:xe.u ..l!til....UJihl.1m ..UJihl...!!til.~..!!til.~ 1980 415 2026 113 487 9 39 521 2551 19115 496 2424 155 665 10 47 643 3136 1990 616 3009 269 1155 21 93 880 4256 1995 720 3569 267 1146 25 110 983 4826 2000 781 3865 200 858 29 130 981 41153 2005 862 4262 175 753 34 151 1040 5166 2010 1012 4991 173 744 39 175 1188 5910 Table Asp.Peak Demand and Amual Energy. Medi\lll Eoonanic SCenario.Plan 4 Anchor~Fai rbilnks-Glennallen-Total Cook Iolet TaMM Valley yaldez RaiJhelt Peak sales Peak sales Peak sales Peak sales :xe.u ..!!til...UJihl...!!til...UJihl...!!til...UJihl...!!til...UJihl. 1980 415 2026 113 487 9 39 521 2551 19115 496 2424 155 666 10 47 643 3136 1990 616 3007 269 1156 21 93 880 4256 1995 722 1578 268 1148 25 110 9115 4837 2000 792 3921 203 869 29 130 994 4919 2005 884 4369 180 m 34 151 1066 5291 2010 1038 5120 179 767 39 175 1219 6062 A.1O Tabl e A.18.Peak Demand and Annual Fnlrgy. Lai Ecorr::mic Scenario,Plan 1A Anchorage-Fairbanks-Glennallen-Total Cook Inlet TaMM Vallet valdez Bailbp1t Peak sales Peak sales Peak sales Peak sales ~.1!Iil.~JIID.~JIID.~JIID..1Whl. 19~415 2027 114 488 9 ~9 522 2554 1985 476 2325 154 661 9 42 621 3028 1990 557 2721 251 1078 12 54 797 3853 1995 609 2971 239 1023 15 69 837 4063 2000 647 3157 174 746 18 84 815 3988 2005 721 3520 153 655 22 102 870 4278 2010 852 4157 153 655 27 124 1001 4936 Table A.19.Peak Demand and Annual Fnlrgy, Lai Ecorr::mic Scenario,Plan 1B Anchorage-Fairbanks-Glennallen-Total Cook Inlet Tanana Vall Cr'Valdez Bai 1 bp1 t Peak sales Peak sales Peak sales Peak sales ~JIID.~.1Itil.~.1Itil.~.1Itil.~ 19~415 2027 114 488 9 39 522 2554 1985 482 2353 153 657 9 42 626 3052 1990 610 2978 245 1051.12 54 841 4083 1995 629 3070 236 1012 15 69 854 4150 2000 609 2971 163 700 19 85 767 3756 2005 668 3261 146 627 23 104 812 3991 2010 831 4055 162 696 28 128 991 4878 Table A.20.Peak Demand and Annual Fnlrgy. Lai Ecorr::mic Scenar io,Plan 2A Anchorage-Fairbanks-Glennallen-Total CmIr Inlet TaMM Valley Valc1ez 811 1 bplt Peak sales Peak sales Peak sales Peak sales ~.1Itil.~.1Itil.~.1Itil.~.1Itil.~ 19~415 2027 114 488 9 39 522 2554 1985 419 1988 142 600 9 41 553 2629 1990 478 2269 243 1040 12 54 712 3362 1995 565 2717 235 1008 15 68 791 3793 2000 604 2908 173 740 18 84 772 3732 2005 674 3244 153 654 22 102 825 4000 2010 775 3724 149 638 27 124 923 4486 A.ll TahJ e A.21.Peak Demand and Amual Energy. Lew Econanic Scenario,Plan 2B Anchora~Fairbanks-Glennallen-Total Cook Inlet Tanana Val lev Valdez RaiJbe1t Peak Sales Peak Sales Peak Sales Peak Sales ~.ilill.~1ltil.lWb1.1ltil.~1ltil.~ 1980 415 2027 114 488 9 39 522 2554 1985 424 2013 141 597 9 41 557 2651 1990 525 2486 237 1016 12 53 751 3554 1995 591 2846 235 1008 15 68 816 3922 2000 587 2824 167 718 19 85 750 3627 2005 646 3109 151 647 23 104 796 3859 2010 811 3905 169 726 28 127 979 4758 Table A.22.Peak Demand and Amual Energy. Lew Econanic Scenario,Plan 3 Anchora~Fairbanks-Glennallen-Total Cook Inlet TanaM Ya1]ey Valdez Rajlbelt Peak Sales Peak Sales Peak Sales Peak Sales ~1ltil.lWb1.1ltil.lWb1.1ltil.lWb1.1ltil.lWb1. 1980 415 2027 114 488 9 39 522 2554 1985 476 2325 154 661 9 42 621 3028 1990 557 2721 251 1078 12 54 797 3853 1995 618 3018 242 1038 15 69 850 4125 2000 675 3293 182 781 18 84 850 4158 2005 723 3530 154 659 22 102 873 4291 2010 815 3981 146 627 27 124 960 4732 Tahl e A.23 •Peak Demand and Amual Energy. Lew Econanic Scenario,Plan 4 Anchora~Fairbanks-Glennallen-Total Cook Inlet TaMM Valley VAldeZ Raj J bel t Peak Sales Peak Sales Peak Sales Peak Sales 1£IU 1ltil.lWb1.1ltil.lWb1.1ltil.lWb1.1ltil.lWb1. 1980 415 2027 114 488 9 39 522 2554 1985 476 2325 154 661 9 42 621 3C28 1990 557 2721 251 1078 12 54 7'T1 3853 1995 610 2978 239 1026 15 69 839 4073 2000 657 3206 177 758 18 84 827 4048 2005 739 3607 157 674 22 102 892 4383 2010 859 4194 154 662 n 1010 6980 A.12 Table A.24.Peak DEmand and Amual Energy. High Eoonanic SCenario,Plan lA Anchor~Fairbanks-Glennallen-Total Cook Inlet TaMM ¥al)c:i Valdez Raj1te't Peak sales Peak sales Peak sales Peak sales Ie.u l!Iil..!liihl.l!Iil..!liihl.l!Iil..!liihl.l!Iil..!liihl. 1980 415 2025 113 486 9 39 521 2550 1965 515 2512 157 671 12 55 663 3238 1990 696 3400 293 1257 100 758 1057 5414 1995 811 4012 294 1264 105 782 1175 6058 2000 922 4552 237 1015 III 808 1232 6375 2005 1133 5565 235 1009 118 840 1443 7434 2010 1425 7008 262 1122 126 881 1760 9011 Table A.25.Peak Demand and Amual Energy. High Eoonanic SCenario,Plan IB Anchorage-Fairbanks-GlP.lUla11en-Total OPk Inlet TaMm yallgy Valdez Bail bftl t Peak sales Peak sales Pe<lk sales Peak sales Ie.u l!Iil..!liihl.l!Iil..!liihl.mil..!liihl.l!Iil..!liihl. 1980 415 2025 113 486 9 39 521 2550 1965 520 2536 156 668 12 55 667 3259 1990 744 3630 292 1252 99 757 1102 5639 1995 831 4107 298 1278 105 782 1198 6168 2000 872 4311 226 971 111 809 1174 6092 2005 1081 5332 233 1000 118 844 1391 7175 2010 1513 7440 303 1300 128 887 1888 9627 Tab]e A.26 •Peak DEmand and Amual Energy. High Eoonanic SCenario.Plall 2A Anchor~Fairbanks-Glennallen-Total Cook Inlet TaMM yAlley Valdez Bai1t>e't Peak sales Peak sales Peak sales Peak sales IJm l!Iil..!liihl.l!Iil..!liihl.l!Iil..!liihl.l!Iil..!liihl. 1980 415 2025 113 496 9 39 521 2550 1965 454 2153 144 610 12 53 592 2816 1990 608 2880 286 1223 99 757 964 4960 1995 764 3724 294 1261 105 781 1129 5767 2000 814 3960 220 944 111 808 1112 5711 2005 962 4669 211 902 118 840 1253 6411 2010 1195 5783 230 984 126 880 1506 7647 A.13 TahJ e A.27.Peak Denand and Amual Energy. High Econcmic Scenario,Plan 2B Anchorage-Fairbanks-Glennallen-Total rook Inlet Tanana va]J gy Valdez Rajlbe1t Peak Sales Peak Sales Peak Sales Peak Sales 1eil.t .mil.~1ltll..filihl.1ltll..filihl.1ltll.~ 1980 415 2025 113 486 9 39 521 2550 1985 458 2175 144 607 12 53 596 2835 1990 648 3069 285 1219 99 755 1002 5043 1995 793 3864 301 1291 105 782 1164 5937 2000 840 4090 231 990 ill 809 1148 5888 2005 1036 5031 238 1018 118 843 1352 6892 2010 1438 6964 305 1305 ~_28 887 1816 9156 ?'abJe A.28.Peak Demand and Annual Energy. High Econcmic Scenario,Plan 3 Anchorage-Fairbanks-Glen/la11en-Total Cook Inlet Tanana 'la11~Valdez Rajlty:lt Peak Sales Peak Sales Peak Sales Peak Sales .Ye.u 1ltll..filihl.1ltll.llEll.1ltll.~1ltll.~ 1980 415 2025 113 486 9 39 521 2550 1985 515 2512 156 671 12 55 663 3237 1990 697 3403 293 1255 100 758 1058 5416 1995 810 4007 294 1262 105 782 1174 6052 2000 892 4408 229 984 III B08 1196 6201 2005 1040 5128 215 920 118 840 1332 6889 2010 1297 6386 236 1011 126 881 1611 8278 Table A.'~.Peak Demand and Annual Energy. High Econcmic Scenario,Plan 4 Anchorage-Fairbanks-Glennallen-Total Cook Inlet Tanana Yall~valdez Rajlbelt Peak Sales Peak Sales Peak Sales Peak Sales 1eil.t .um ~1ltll..filihl..um llE1l.1ltll.~ 1980 415 2025 113 486 9 521 2550 1985 515 2512 156 671 12 663 3237 1990 697 3401 292 1254 100 1057 5413 1995 804 3975 292 1252 105 il65 6009 2000 887 4382 227 973 III 1189 6163 2005 1076 5305 223 955 118 1375 7100 2010 1330 6545 24:-1041 126 1650 lM67 A.14 Tab]e A.30.Peak Demand and Amual Energy. !la'Isustainable GoYermnent Spending,Plan lA Anchor age-Fairbanks-Glennallen-Total Cook InlP.t.....-'J)mano Va]]ev Valdez Ba11hp't Peak sales Peak sales Peak sales Peak sales ~JM J.Wbl..iltil.J.Wbl..iltil.J.Wbl..iltil.J.Wbl. 1980 415 2026 113 487 9 39 521 2551 1985 505 2466 156 671 10 47 652 3184 1990 691 3373 299 1281 14 62 974 4716 1995 713 3482 273 1170 17 79 974 4730 2000 664 3242 180 772 21 94 839 4108 2005 600 2930 129 552 24 108 731 3590 2010 584 2851 106 456 27 124 697 3431 "'bJ e A.31.Peak Demand and Amual Energy, !la'Isustainable GoI7ermnent Spending,Plan 1B Anchorage-Fairbanks-Glennallen-Total Cook Inlet 'J)mano VallCV Valdez BA'1 be't Peak sales Peak sales Peak sales Peak sales ~JIIil.J.Wbl.Jail.J.Wbl.Jail.J.Wbl..iltil.J.Wbl. 1980 415 2026 113 487 9 39 521 2551 1985 506 2469 157 673 10 47 653 3189 1990 694 3390 301 1290 14 62 979 4741 1995 703 3434 270 1160 17 79 962 4672 2000 618 3017 168 719 21 94 783 3830 2005 543 2651 117 500 24 108 663 3259 2010 523 2551 95 407 27 124 626 3082 Table A.32.Peak Demand and Amual Energy. Industrialization scenario,Plan lA Anchorage-Fairbanks-Glennallen-Total Cook Inlet TaMM Valley Valdez Bili'hp't Peak sales Peak sales Peak sales Peak sales ~.iltil.J.Wbl.Jail.J.Wbl.Jail.J.Wbl.Jail.J.Wbl. 1980 415 2026 113 487 9 39 521 2551 1985 501 2447 157 672 12 55 650 3174 1990 755 4170 272 1169 25 114 1022 5453 1995 1084 6890 247 1060 276 2284 1560 10235 2000 1081 6874 172 737 281 2306 1489 9917 2005 1181 7361 156 668 287 2334 1576 10363 2010 1382 8343 169 726 294 2367 1791 11436 A.15 TabJe A.33.Peak Demand and Annual Energy. Industrialization Soenario.Plan 1B Anchorage-Fairbanks-Glenna11en-Total Cook Inlet Tanana Vall e:i valdez Raj 1 t>e1 t Peak Sales Peak Sales Peak Sales Peak Sales jfm J.ItD..«ii:Illl..Utll.~.Utll.~.Utll.~ 1980 415 2026 113 487 9 39 521 2551 1985 501 2446 157 671 12 55 650 3172 1990 756 4175 273 1171 25 114 1023 5459 1995 1083 6882 247 1061 276 2284 1559 10227 2000 1065 67n 167 717 281 2306 1469 9820 2005 1200 7457 159 682 287 2334 1598 104'12 2010 1503 8934 192 ll23 294 2367 1931 12124 Table A.34.Peak Demand and Annual Energy. Superhigh Econanic Soenario.Plan lA Anchorage-Fairbanks-Glennallen-Total • Cook Inlet TaMM yal 1 ey I valdez Baj 1 bel t Peak Sales Peak Sales P:»k Sales Peak Sales jfm .Utll.~.Utll.~.Utll.~.Utll.~ 1980 415 2025 113 486 9 39 521 2550 1985 516 2518 157 672 12 55 665 3245 1990 814 4460 290 1244 101 763 1170 6467 1995 1163 7275 273 1172 352 2936 1736 11382 2000 1191 7413 203 873 358 2963 1701 11249 2005 1354 8205 196 840 364 2994 1858 12039 2010 1624 9527 223 956 373 3034 2156 13516 Tab]e A.35.Peak Demand and Annual Energy. SJ'PE!rhigh Econanic Soenario.Plan 1B Anchorage-Fairbanks-Glennallen-Total Cook Inlet Tanana vall W Valdez Raj1be't Peak Sales Peak Sales Peak Sales Peak Sales jfm .Utll.~.Utll.~.Utll.~.Utll.~ 1980 415 2025 113 486 9 39 521 1985 5J.6 2518 157 672 12 55 665 1990 820 4489 292 1251 101 763 1177 1995 1171 7314 277 1187 352 2936 1747 2000 1166 7291 196 841 358 2963 1 2005 1356 8214 195 837 364 2994 2010 1739 10089 245 1052 373 3034 A.16 Table 6.36.Peak Demand and Amual Energy. No Capital Recovery.Plan 1h Anchorage-Fairbanks-Glennallen-Total Cook Inlet;Tanano valley Valdez Btilbelt Peak sales Peak sales Peak sales Peak sales ~.!!In.~.!!In.~.!!In.~.!!In.~ 1980 415 2026 113 487 9 39 521 2551 1985 511 2495 160 687 10 47 662 3229 1990 693 3385 307 1317 21 93 991 4795 1995 897 4433 338 1449 25 liO 1223 5993 2000 li85 5836 312 1339 29 130 1482 7305 2005 1519 7466 322 1380 34 151 1819 8997 2010 1971 9675 361 1550 39 175 2302 li401 Table A.37.Peak Demand and Amual Energy. No Capital Recovery.Plan 1B Anchora~Fairbanks-Glennallen-Total Cook Inlet;TaMM yalley vAldez Bajltyelt Peak sales Peak sales Peak sales Peak sales IiliI.r..!!In.~.!!In.~.!!In.~.!!In.~ 1980 415 2026 li3 487 9 39 521 2551 1985 5li 2495 160 688 10 47 662 3230 1990 699 3412 3li 1334 21 93 1001 4839 1995 971 4793 366 1571 25 liO 1322 6475 2000 1464 7197 393 1684 29 130 1830 9012 2005 1928 9463 416 1787 34 151 2308 li400 2010 2538 12442 477 2048 39 175 2965 14665 Table A.38.Peak Demand and Amual Energy. Low Fuel Prices,Plan lA Anchorage-Fairbanks-Glennallen-Total 020k Inlet TaMM yalley va1 tjez Bajlty:l t Peak sales Peak sales Peak sales Peak .sales ~J!Iil ~J!Iil ~J!Iil ~J!Iil ~ 1980 415 2026 li3 487 9 39 521 2551 1985 498 2430 156 667 10 47 644 3144 1990 634 3093 278 li91 21 91 904 4375 1995 758 3753 289 1240 24 107 1040 5100 2000 784 3879 210 901 27 122 991 4902 2005 848 4192 185 793 31 139 1033 5124 2010 981 4842 183 786 35 157 li64 5785 A.17 Table A.39.Peak Demand and Amual Energy. Loll Fuel Prices,Plan 1B Anchorage-Fairbanks-Glerulal1erl-Total. Cook Inlet TJMM yoll cv yale"BailheJ t Peak sales Peak sales Peak sales Peak sales IJm llIil.jgjhl llIil.jgjhl llIil.jgjhl llIil.jgjhl 1980 415 2026 113 487 9 39 521 2551 1985 503 2457 155 664 10 47 649 3168 1990 686 3346 273 1172 20 90 951 4609 1995 786 3889 290 1243 24 107 1067 5238 2000 777 3846 210 900 27 123 985 4870 2005 830 4105 184 789 32 142 1015 5037 2010 968 4780 190 815 37 166 1160 5761 Table A.4O.Peak Demand and Amual Energy, Loll Fuel Prices,Plan 2A Anchorage-Fairbanks-Glennallen-Total. Cook Inlet TaMM Va))e:i Valdez BlIi1te't Feak sales Peak sales Peak sales Peak sales lim llIil.jgjhl llIil.jgjhl .ilIQ.jgjhl .ilIQ.jgjhl 1980 415 2026 113 487 9 39 521 2551 1985 :38 2079 144 606 10 46 574 2731 1990 545 2584 269 1153 20 90 810 3827 1995 702 3430 284 1217 24 106 980 4753 2000 707 3450 201 860 27 122 908 4433 2005 752 3666 174 744 31 139 928 4549 2010 863 4201 172 736 35 157 1038 5094 Table A.41.Peak Demand and Amual Energy. Loll Fuel Prices,Plan 2B Anchorage-Fairbanks-Glennallen-Total. Cook Inlet Tanam yall ev Valdez Bail bel t Peak sales Peak sales Peak sales Peak sales lim llIil.jgjhl .ilIQ.jgjhl .ilIQ.jgjhl .ilIQ.jgjhl 1980 415 2026 113 487 9 39 521 2551 1985 443 2104 143 604 10 46 579 2753 1990 598 2834 268 1146 20 90 860 4069 1995 757 3698 295 1266 24 106 1045 5070 2000 734 3582 209 898 27 123 942 4603 2005 769 3749 181.777 32 142 954 4668 2010 867 4217 181.775 37 166 1053 5158 A.18 Tabl e A.42.Peak Demand and Amual Erergy. Lai Fuel Prices,Plan 3 Anchor~Fairbanks-Glennallen-Total Cook Inlet TaMna Valley Valdez BlJilbf1t Peak sales Peak sales Peak sales Peak sales IIW:.ilIil.J.lijbL l!til.J.lijbL l!til.~l!til.J.lijbL 19lkl 415 2026 113 487 9 39 521 2551 1985 498 2431 156 668 10 47 645 3146 1990 634 3093 278 1191 21 91 905 4375 1995 754 3733 287 1232 24 107 1034 5072 2000 759 3757 204 874 27 122 961 4753 2005 792 3917 171 733 31 139 965 4789 2010 955 4713 178 762 35 157 1133 5632 Tabl e A,43 •Peak Demand and Amual Erergy. Lai Fuel Prices,Plan 4 Anchor~Fairbanks-Glennallen-Total Cook Inlet Tanana Vall e:t Valdez Bl!'lbf1t Peak sales Peak sales Peak sales Peak 5al.es IIW:.!!Iii.J.lijbL l!fil.J.lijbL l!til.J.lijbL l!til.J.lijbL 19lkl 415 2026 113 487 9 39 521 2551 1985 498 2430 156 667 10 47 644 3144 1990 634 3093 278 1191 21 91 904 4375 1995 765 3785 291 1250 24 107 1048 5141 2000 805 3983 216 928 27 122 1018 5033 2005 870 4300 190 815 31 139 1059 5254 2010 990 4886 186 798 35 157 1176 5841 Table A,44.Peak Demand and Amual Erergy. High Fuel Prices,Plan lA Anchor~Fairbanks-Glennallen-Total Co*Inlet Tanana yal1e:t Valdez Bajlhelt Peak sales Peak sales Peak sales Peak sales IIW:l!til.J.lijbL .iltll.~lim J.lijbL l!fil.J.lijbL 19lkl 415 2026 113 487 9 39 521 2551 1985 498 2432 156 668 10 47 645 3147 1990 641 3127 279 1195 21 94 913 4417 1995 793 3922 289 1239 26 114 1075 5275 2000 848 4191 209 896 31 138 1056 5225 2005 942 4653 183 786 36 164 1128 5602 2010 1126 5549 182 783 4)196 1312 6527 A.19 "'bl e 6,45.Peak IlEmIlnd and Amual Energy. High Fuel Prices,Plan 18 Anchorage-Fairbanks-Glennallen-Total Cools Inlt;~Tanano Valley Valdez Baj 1 tel t Peak SlIles Peak sales Peak sales Peak sales ~J!Iil.~J!Iil.~J!Iil.~J!Iil.~ 1980 415 2026 113 487 9 39 521 2551 1985 504 2459 155 665 10 47 649 3171 1990 693 3383 274 1175 21 93 959 4652 1995 814 4027 287 1233 26 114 1094 5374 2000 830 4103 205 881 31 138 1035 5122 2005 978 4826 192 826 37 168 1173 5820 2010 1330 6547 228 979 46 208 1558 7734 Tab]e A.46 ..Peak IlEmIlnd and Amual Energy. High Fuel Prices,Plan 2A Anchorage-Fairbanks-Glennallen-Total Ollk Inlet Tanano yal)ey yaldez Bo'1ty:l t Peak sales Peak sales Peak SlIles Peak SlIles ~J!Iil.~J!Iil.~J!Iil.~J!Iil.~ 1980 415 2026 113 487 9 39 521 2551 1985 438 2081 144 607 10 46 575 2734 1990 552 2618 270 1158 21 93 819 3869 1995 736 3593 284 1219 26 114 1015 4926 2000 759 3702 198 847 31 138 958 4687 2005 826 4024 170 728 36 164 1002 4916 2010 979 4761 168 721 43 195 1156 5677 Table 6,47.Peak Demand and Amual Energy. High Fuel Prices,Plan 2B Anchorage-Fairbanks-G1enna11en-Total Cools Inlet Tanano yal1ev Valdez Bip 11 be1 t Peak sales Peak sales Peak sales Peak sales Ie.u .!!In.~J.Itil.~J!Iil.~J.Itil.~ 1980 415 2026 113 487 9 39 521 2551 1985 444 2106 143 604 10 46 579 2756 1990 602 2850 268 1146 21 92 864 4088 1995 781 3815 292 1252 25 114 1067 5180 2000 809 3948 213 911 31 138 1022 4997 2005 936 4553 197 844 37 168 1136 5566 2010 1227 5953 2Z3 956 46 207 1152 7116 A.20 Tab]e A,48.Peak Demand and Amual Erergy. High Fuel Prices,Plan 3 Anchorage-Fairbanks-Glennallen-Total Co*Inlet TanaM yal]ex Valdez Rajlhp1t Peak sales Peak sales Peak sales Peak sales ~.am ..uJibl..am ..uJibl..am ..uJibl..am ~ 1980 415 2026 113 487 9 39 521 2551 19lfi 498 2432 156 668 10 47 645 3147 1990 641 3129 278 1194 21 94 913 4417 1995 7ff1 3894 287 1231 26 114 1068 5240 2000 807 3992 199 lfi4 31 138 1007 4983 2005 861 4256 166 712 36 164 1032 5131 2010 1031 5084 166 712 43 196 1204 5991 Tab]e A.49.Peak Demand and Amual Erergy. High Fuel Prices,Plan 4 llnchorage-Fairbanks-Glennallen-Total Cook Inlet Tanana Vall Ci Valdez Bail bpl t Peak sales Peak sales Peak sales Peak sales 1e.u:.am .fimll..am ..uJibl..am ..uJibl..am ..uJibl. 1980 415 2026 113 487 9 39 521 2551 19lfi 498 2432 156 668 10 47 645 3147 1990 640 3125 278 1193 21 94 912 4412 1995 7ff1 3893 287 1230 26 114 1067 5237 2000 824 4077 203 871 31 138 1028 5086 2005 898 4436 174 747 36 164 1076 5347 2010 1076 5303 173 743 43 196 1254 6241 A.21 APPENDIX B LEVELIZED COST OF POWER APPENDIX B LEVELIZED COST OF POWER In this report the levelized cost of power is used to compare the costs of power from the various electric energy plans.The relationship between the annual cost of power and the levelize(.cost of power over a certain time horizon is shown in Figure B.1. The total capital costs for a particular power plan (assuming no generating facility additions for this example)are fixed by the initial financing and are typically constant over the life of the plant.Operation and maintenance and fuel costs typically increase over time as affected by inflation and as real fuel price increases.As a result the annual cost of power progressively increases over time. ANNUAL COST PLANA ANNUAL COST ~N8 LfVElIZED COST OF~NA TIME (YEARS) FIGURE B.1.Annual Cost of Power and Total Levelized Cost B.l The levelized cost of power is computed using the present worth of the annual costs of power produced over the time horizon.In equation form: Levelized Cost of Power =PWCP * where: d(l+d)i {1+d)i -1 (I) PWCP =Present worth of the cost of power d =Real discount rate =year -1981 (base year) In turn: where: PWCP n TAC i 1 =~rJ>P:"*--:''--,- i=1 1 {1+d)i (2) TAC i =Total annual costs in year i (S) EPP i =Electrical power produced in year i (kWh) n =time horizon (years) Figure B.2 illustrates the use of the levelized cost of power to select the alternative with the lower power cost.Alternative A represents a plan with lower initial annual costs of po~er but with high annual costs of power in later years.Alternative B represents a plan with higher initial costs of power but with lower costs of power in later years.Without the use of a present worth analysis,the selection of the lower cost plan would be unclear. Initially,Plan A looks more attractive,whereas alternative B looks more attractive in later years.Using levelized costs,however,Plan B is clearly the lower cost plan over the time horizon. B.2 LEVELl ZED COST---'- TIME (YEARS) FIGURE B.2.Use of Levelized Cost to Select Lowest Life Cyclc-Co~t Plan B.3 REFERENCES Acres American Incorporated.1981a.Preliminary Assessment of Cook Inlet Tidal Power.Prepared by Acres American Incorporated for Office of The Governor,State of Alaska,Juneau,Alaska.. Acres American Incorporated.1981b.Upper Susitna Project Development ~election Report.Prepared by Acres American Incorporated for Alaska Power Authority,Anchorage,Alaska. Alaska Power Administration.1977.8radley Lake Project Power Market AnalYsis.United States Department of The Interior,Alaska Power Adminis- tration,Juneau,Alaska. Alaska Power Administration.1980.Hydroelectric Alternatives for the Alaska Railbelt.Alaska Power Authority,Juneau,Alaska. 8ackshire,J.A.1981a.Energy Conservation,Solar and Wood for Space and Water Heating.Alaska Renewable Energy Associates,Anchorage,Alaska. Backshire,J.A.1981b.Maximum Possible Technolo~ical Market Penetra~ion of Selected Renewable Energy Technologies in Alas a's Railbelt Region. Alaska Renewable Energy Associates,Anchorage,Alaska. Bechtel Civil and Minerals,Incorporated,1981.Chakachamna Hydroelectric Project Interim Report.Prepared for The Alaska Power Authority,Anchorage, Alaska. CH?M-Hill.1981.Feasibility Assessment:HSdropower Development of Grant Lake.Prepared for City of Seward,Alaska y CR 2M-Hi",Anchorage,Alaska. Dow-Shell.1981.Report to the State of Alaska:Feasibility of a Petro- chemical Industry.Dow-Shell,Anchorage,Alaska. Ebasco Services Incorporated.1982a.Browne Hydroelectric Alternative for the Railbelt Region of Alaska.Prepared for Office of The Governor, State of Alaska,Juneau,by Ebasco Services Incorporated and Battelle,Pacific Northwest Laboratories,Richland,Was~ington. Ebasco Services Incorporated.1982b.Chakachamna Hydroelectric Alternatives for the Railbelt Recion of Alaska.Prepared for Office of The Governor,State of Alaska,Juneau,by Ebasco Services Incorporated and Battelle,Pacific Northwest Laboratories,Richland,Washington. Ebasco Services Incorporated.1982c.Coal-Fired Steam Electric Power Plant Alternatives for the Railbelt Region of Alaska.Prepared for Office of The GOvernor,State of Alaska,Juneau.by Ebasco Services Incorporated and Battelle,Pacific Northwest Laboratories,Richland,Washington. Ebasco Services Incorporated.1982d.Coal Gasification Combined-Cycle Power Plant Alternatives for the Railbelt Region of Alaska.Prepared for Office of The Governor,State of Alaska,Juneau,by Ebasco Services Incorporated and Battelle,Pacific Northwest Laboratories,Richland,Washington. R.l II. Ebasco Services Incorporated.1982e.Natural Gas-Fired Combined-Cycle Power Plant Alternatives for the Railbelt Region of Alaska.Prepared for Office of The Governor,State of Alaska,Juneau,by Ebasco Services Incorporated and Battelle,Pacific Northwest Laboratories,Richland,Washington. Ebasco Services Incorporated.1982f.Wind Energy Alternatives for the Railbelt Region of Alaska.Prepared for Office of The Governor,State of Alaska,Juneau,by Ebasco Services Incorporated and Battelle,Pacific Northwest Laboratories,Richland,Washington. EKONO,Inc.1980.Peat Resource Estimation in Alaska-Final Report~Volume Prepared by EKONO,Inc.for the Division of Fossil Energy,the U.• Department of Energy,Washington,D.C. Electric Power Research Institute (EPRI).1918.Costs and Benefits of Ove~/ Under Capacity in Electric Power System Planning.EA-927.Prepared by Oeci~ion Focus,Inc.for EPRI,Palo Alto,California. GolAsmith,S.and E.Porter.1981.Alaska Economic Projections for Estimating Electricity Requirements for the Railbelt.University of Alaska Institute of Social and Economic Research,Juneau,Alaska. King,J.C.1982.Selection of Electric Energy Generation Alternatives for Consideration in Railbelt Electric Energy Plans.Prepared for the Office of The Governor,State of Alaska,Juneau,by Battelle,Pacific Northwest Laboratories,Richland,Washington. King,J.C.et al.1981.Candidate Electric Enerqy Technologies for Future Application in the Railbelt Region of Alaska.Prepared for the Office of The Governor,State of Alaska,Juneau,by Battelle,Pacific Northwest Laboratories,Richland,Washington. King,M.J.and M.J.Scott.1982.Railbelt Electricity Demand (RED)Model Documentation Report.Battelle,Pacific Northwest Laboratories, Richland,Wa~hington. Swift,W.H.et al.1918.Energy Intensive Industry for Alaska.Battelle, Pacific Northwest Laboratories,Richland,Washington. U.S.Army Corps of Engineers.1981.Electrical Power for Valdez and the Copper River Basin.U.S.Army Corps of Engineers,Alaska District, Anchorage,Alaska. U.S.Department of Energy.19~.Economic Analysis-Energy Performance Standards for New Buildings.Office of Conservation and Solar Energy and Office of Buildings and Community Systems,U.S.Department of Energy, Washington,D.C. R.2 FILMED AT ARCTIC ENVIRON~~NTAL INFO~MTION AND DATA CENTER 707 A STREET ANCHORAGE,AK 99501