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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
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R.2
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