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Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation Report
Public Review Draft
Prepared by:
Vermont Energy Investment Corporation
In Collaboration With:
Alaska Center for Energy and Power
October 29th, 2012
Acknowledgements
The Impact Evaluation of the Alaska Renewable Energy Grant Recommendation Program was conducted
by Vermont Energy Investment Corporation (VEIC) serving as Prime Contractor. VEIC team
members participating in the evaluation included: David Hill serving as Project Team Leader; Chris Badger
serving as Project Manager; Leslie Badger conducting impact and benefit cost analysis; and Nikki Clace
and Molly Taylor providing project administration, editing, and production support.
Alaska Center for Energy and Power (ACEP) served as subcontractor with Gwen Holdmann leading
the ACEP team and providing direct experience with the Alaska renewable energy indus try; Julie Estey
coordinating engagement with Alaska stakeholders; and Dennis Witmer providing technical assessment,
analysis and evaluation of the program database.
The VEIC team and the Alaska Energy Authority appreciate the significant time and thought fulness of the
AEA project managers, AEA management, ISER staff and individual stakeholders contributed through
participation in individual telephone and in person interviews.
This report was written on behalf of the Alaska Energy Authority, but the views expressed in this report are
those of the study authors, consistent with the commissioning of this work as an independent study.
To contact the study authors or the Alaska Energy Authority:
David Hill, Managing Consultant
Vermont Energy Investment Corporation
128 Lakeside Avenue, Suite 401
Burlington, Vermont 05401
802-658-6060
www.veic.org
Sean Skaling, Deputy Director
Alternative Energy and Energy Efficiency
Alaska Energy Authority
813 West Northern Lights Boulevard
Anchorage, AK 99503
907-771-3079
www.akenergyauthority.org
Table of Contents
Executive Summary ............................................................................................ 6
Participation ........................................................................................................ 7
Economic Impacts ......................................................................................................... 9
Lessons Learned.......................................................................................................... 12
Alaska’s Renewable Energy Market Development .................................................... 13
Conclusions ................................................................................................................. 13
1. Introduction ................................................................................................ 15
Context and Background............................................................................................. 15
Report Objectives........................................................................................................ 16
Study Schedule and Team ........................................................................................... 17
VEIC and ACEP Team Roles ..................................................................................... 18
Organization of the Report.......................................................................................... 18
2. Study Methodology ................................................................................... 20
Evaluation Priorities & Research Questions ............................................................... 20
Data Sets and Previous Analyses ................................................................................ 21
Interviews .................................................................................................................... 22
Benefit Cost Analyses ................................................................................................. 23
3. Program Participation and Demographics .............................................. 27
Summary ..................................................................................................................... 27
Supporting High Cost of Energy Communities and Projects in Alaska ..................... 28
REGRP Support for a Broad Mix of Applicants and Renewable Resources ............. 30
Tracking Projects through Stages of Development .................................................... 32
4. Benefit/Cost Analysis Results .................................................................. 35
Summary ..................................................................................................................... 35
Construction Portfolio – Projected Benefit Cost Results ............................................ 36
Operating Portfolio – Benefit Cost Results Reflecting Early Operational Data ......... 37
Construction Portfolio – Including Operating Data .................................................... 39
Operating Portfolio - Participant Test – Benefit Cost Results .................................... 41
Construction Portfolio – Leveraged Investment ......................................................... 42
Power Cost Equalization Impacts ............................................................................... 45
Impacts of the REGRP .............................................................................................. 46
Job Impacts ............................................................................................................... 48
Environmental Impacts ............................................................................................. 50
5. Renewable Energy Resource Subsector Analysis ................................. 51
Overview ..................................................................................................................... 51
Wind ............................................................................................................................ 52
Wind Costs, Performance and Lessons Learned....................................................... 56
Barriers ...................................................................................................................... 58
Hydropower Energy .................................................................................................... 59
Hydro Costs, Performance and Lessons Learned ..................................................... 63
Barriers ...................................................................................................................... 64
Biomass and Landfill Gas ........................................................................................... 66
Biomass Costs, Performance and Lessons Learned .................................................. 70
Barriers ...................................................................................................................... 71
Geothermal .................................................................................................................. 72
Geothermal Costs, Performance and Lessons Learned ............................................. 76
Barriers ...................................................................................................................... 76
Heat Recovery ............................................................................................................. 77
Heat Recovery Costs, Performance and Lessons Learned ........................................ 80
Barriers ...................................................................................................................... 81
6. Market Development .................................................................................. 82
Overview ..................................................................................................................... 82
Framing the Renewable Energy Fund ......................................................................... 84
State Leadership and Policy Action ............................................................................ 85
Affirming the Goal:................................................................................................... 85
Setting a State Energy Policy:................................................................................... 85
Program Creation: ..................................................................................................... 85
Other Financing Mechanisms: .................................................................................. 86
Resource Specific Policy: ......................................................................................... 86
Regional Planning ....................................................................................................... 86
Business Indicators of Market Development .............................................................. 87
Business Licenses ..................................................................................................... 87
Cost Stabilization ...................................................................................................... 88
Local Business Support............................................................................................. 88
Impact on Jobs .......................................................................................................... 88
RE Fund Job Analysis ................................................................................................. 89
Organizational Growth in the Energy Sector .............................................................. 89
Renewable Energy Alaska Project (REAP) .............................................................. 90
Alaska Village Electric Cooperative ......................................................................... 91
WH Pacific ................................................................................................................ 91
Alaska Center for Energy and Power........................................................................ 92
RE Fund Support and Communication: conferences, workshops, working groups and
publications ................................................................................................................. 93
Rural Energy Conference .......................................................................................... 93
Business of Clean Energy Alaska Conference.......................................................... 93
Workshops ................................................................................................................ 94
Working Groups........................................................................................................ 94
Renewable Energy Atlas ........................................................................................... 94
Alaska Energy Wiki .................................................................................................. 95
Wind Community Toolkit ......................................................................................... 95
Wind Best-Practices Guide ....................................................................................... 95
7. Conclusions ............................................................................................... 96
Appendix A: RE Jobs in Alaska ....................................................................... 98
Appendix B: List of Impact Evaluation Interviewees ................................... 101
Appendix C: Operational, Construction and Pre-Construction Projects ... 102
Appendix D: Bibliography .............................................................................. 105
Alaska Energy Authority Reports and Documents ................................................... 105
Alaska Authorizing Legislation and Regulatory Orders ........................................... 105
Alaska Resource Assessments .................................................................................. 105
Prior Evaluations ....................................................................................................... 106
Utility and Other Plans for Renewable Development ............................................... 106
Additional Resources ................................................................................................ 106
Table of Figures
Figure ES.1 Appropriated Funds by Resource (Rounds I-IV) ......................................................... 8
Figure ES.2 Geographic Distribution and Type of Projects ............................................................. 9
Figure ES.3 2011 Construction Portfolio Benefits and Costs with Operational Data .................... 10
Figure 1.1 Alaska Renewable Energy Stakeholders and Program Infrastructure ......................... 16
Figure 3.1 Appropriated Funds by Resource (Rounds I -IV) .......................................................... 28
Figure 3.2 Distribution of REGRP projects across Alaska ............................................................ 29
Figure 3.3 REGRP Project Funding by Technology and Community Cost of Energy .................. 30
Figure 3.4 Funding Success by Technology Type – Requested vs. Appropriated ....................... 31
Figure 3.5 Funding Success by Applicant Type – Requested vs. Appropriated ........................... 32
Figure 3.6 Funding by Phase ........................................................................................................ 32
Figure 3.7 Number of REGRP Projects by Project Status and Renewable Resource .................. 33
Figure 4.1 2011 Construction Portfolio Benefits and Costs for REGRP Projects ......................... 36
Figure 4.2 Benefits and Costs of the 2011 Operating Portfolio of REGRP Projects ..................... 38
Figure 4.3 2011 Construction Portfolio Benefits and Costs with Operational Data ....................... 40
Figure 4.4 Participant Cost Test for 2011 Operating Portfolio ...................................................... 42
Figure 4.5 Rural and Railbelt REGRP Appropriations................................................................... 43
Figure 4.6 Breakdown of State and Leveraged Funds for the 2011 Construction Portfolio .......... 44
Figure 4.7 Breakdown of Energy Savings for the 2011 Construction Portfolio ............................. 45
Figure 4.8 Distribution of PCE Impact Benefits for 2011 Operating Portfolio ............................... 47
Figure 4.9 Distribution of PCE Impact Benefits for 2011 Operating and Construction Portfolio ... 48
Figure 5.1 50 Meter Wind Map of Alaska ...................................................................................... 52
Figure 5.2 Wind Generation in Alaska ........................................................................................... 52
Figure 5.3 Benefit to Cost of REGRP Wind Projects in Construction Portfolio ............................. 54
Figure 5.4 AEA reported wind turbine capacity factors ................................................................. 57
Figure 5.5 Hydropower Generation in Alaska .............................................................................. 59
Figure 5.6 Benefit to Cost of REGRP Hydro Projects in Construction Portfolio ............................ 61
Figure 5.7 Alaska Forested Regions ............................................................................................. 66
Figure 5.8 Benefit to Cost of REGRP Biomass Projects in Construction Portfolio ....................... 68
Figure 5.9 Biomass Fuel Harvest Benefits .................................................................................... 71
Figure 5.10 Geothermal Resource Map for Alaska ....................................................................... 72
Figure 5.11 Geothermal REGRP Projects Cost-Benefit Analysis ................................................. 74
Figure 5.12 Alaska Fuel Distribution Map ..................................................................................... 77
Figure 5.13 Heat Recovery REGRP Projects Cost-Benefit Analysis ............................................ 78
Figure 5.14 Efficiency Gains from New Diesel Gensets with Heat Recovery ............................... 81
Figure 6.1 2008 Denali Commission Transmission Study ............................................................ 83
Table of Tables
Table ES.1 REGRP Participation and Funding by Round .............................................................. 7
Table ES.2 Construction Portfolio Benefits and Costs With Operational Results ......................... 11
Table ES.3 Jobs and Avoided Carbon Emission Impacts ............................................................. 11
Table ES.4 Power Cost Equalization Impacts ............................................................................... 12
Table ES.5 Renewable Resources................................................................................................ 13
Table 2.1 Summary of Costs and Benefit Tests Applied to Impact Evaluation ............................. 24
Table 3.1 REGRP Participation and Funding by Round ............................................................... 27
Table 3.2 Multi-phase REGRP Projects ........................................................................................ 34
Table 4.1 Benefits and Costs for the REGRP 2011 Construction Portfolio................................... 37
Table 4.2 As Built Versus Projected Costs and Operating Project Performance .......................... 38
Table 4.3 Total Resource Cost Versus Participant Cost Test ....................................................... 39
Table 4.4 Benefits and Costs for the REGRP 2011 Operating Portfolio ....................................... 39
Table 4.5 Benefits and Costs for the 2011 Construction Portfolio with Operating Data ............... 41
Table 4.6 Participant Cost Test Results for 2011 Operating Projects ........................................... 42
Table 4.7 REGRP Funding Sources – State and Leveraged Funds ............................................. 43
Table 4.8 PCE Impacts .................................................................................................................. 47
Table 4.9 Job and Environmental Benefits of REGRP 2011 Construction Portfolio ..................... 49
Table 4.10 Avoided Carbon Emissions ......................................................................................... 50
Table 4.11 Avoided Emissions Factors for Diesel and Natural Gas Generation .......................... 50
Table 5.1 Costs and Benefits of REGRP Wind Projects in the Construction Portfolio .................. 55
Table 5.2 Installed Cost of Wind Projects by Capacity.................................................................. 56
Table 5.3 Costs and Benefits of REGRP Hydro Projects in Construction Portfolio ...................... 62
Table 5.4 Total Installed Cost of Hydro Projects ........................................................................... 63
Table 5.5 Installed Cost of Hydro Projects by Capacity ................................................................ 64
Table 5.6 Costs and Benefits of REGRP Biomass Projects in Construction Portfolio .................. 69
Table 5.7 2011 Performance of Biomass Projects ........................................................................ 70
Table 5.8 Installed Cost of Biomass Projects by Capacity ............................................................ 70
Table 5.9 Costs and Benefits of REGRP Geothermal and Solar Projects (combined) in
Construction Portfolio .................................................................................................................... 75
Table 5.10 Costs and Benefits of REGRP Heat Recovery Projects in the Construction Portfolio 79
Table 6.1 Renewable Energy Alaska Project Membership Categories ......................................... 90
6 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Executive Summary
The Vermont Energy Investment Corporation (VEIC) in partnership with the Alaska
Center for Energy and Power (ACEP) was retained in mid-December 2011 by the Alaska
Energy Authority (AEA) to conduct an independent program review of the Renewable
Energy Grant Recommendation Program (REGRP). This report presents Phase II of the
review – an impact evaluation of the REGRP.
The impact evaluation summarizes energy savings, avoided emissions and costs and
benefits from REGRP supported projects – highlighting the full range of project types,
renewable energy resources and communities that have participated in the program. Our
research included:
A thorough review of program documentation, program databases, authorizing
legislation, supporting regulations, program reports, and related literature;
Telephone and in person interviews with individual REGRP Program Managers,
AEA management, program stakeholders and, Institute for Social and Economic
Research (ISER) staff;
Analysis of AEA/ISER program tracking data, and
Reporting on four core areas of program impacts:
o Overview and analysis of REGRP program participation and demographics
o Portfolio Level Cost Benefit Analysis
o Renewable Energy Resource Sector Sub-analysis
Project level Benefit/Cost Results
Sector based lessons learned
o Renewable Energy Market Development in Alaska
Overall, the impact evaluation findings indicate the REGRP is cost
effective, and the current portfolio of projects that have reached the
construction phase are projected to provide more than $500 million of
net present value benefits during their lifetimes. In addition, the
REGRP is beginning to provide a resource base of knowledge on the
challenges and opportunities for renewable energy development in
Alaska that can help inform and improve future projects.
7 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Participation
The Alaska Renewable Energy Grant Recommendation Program (REGRP) was
established in 2008 to support the development of renewable energy projects and to
reduce the impact of the high cost of energy for rural communities.
Alaska boasts an abundance of fossil and renewable resources that rival many countries,
but Alaskan consumers pay among the highest rates for heating and electricity in the
country—50% higher than the U.S. average1. According to the Energy Information
Administration, in 2012, Alaska ranked second in 2012 for high residential electricity costs
with an average price of 17.91 cents/kWh as compared to the national average of 11.52
cents/kWh. However many of Alaska’s rural villages mirror 1st ranked Hawaii’s $37.05
cents/kWh.
The REGRP has now completed five rounds of funding as summarized in Table ES-1.
Table ES.1 REGRP Participation and Funding by Round2
Round I - IV V Total
Applications Received 461 97 558
Projects Funded 208 19 227
Grants in Place 180 5 185
Grants Completed 38 0 38
Grants Cancelled 14 0 14
Amount Requested ($M) $1,094 $133 $1,227
AEA Recommended ($M) $239 $43 $282
Appropriated ($M) $177 $26 $202
Cash Disbursed ($M) $100 $8 $108
The solicitation for the fifth round of program funding was issued in the summer of 2011
and recommendations for $43 million of REGRP projects at two funding levels were
presented to the legislature in January, 2012. The governor approved $26 million of
appropriations for the REGRP projects in the State’s FY 2013 capital budget in May,
2012.
All of the primary renewable energy resources have been represented in the application
pool during the 5 rounds of funding. Through the first four rounds approximately 80% of
1 EIA SEDS Database
2 AEA Renewable Energy Fund Update, October 2012.
8 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
the appropriated funds have been for hydro, wind and biomass projects (Figures ES-1 and
2).
Figure ES.1 Appropriated Funds by Resource (Rounds I-IV)
The funding of REGRP projects during the first four rounds generally reflects the
maturity of renewable energy technology sectors coupled with the existing knowledge
base for developing cost-effective projects in communities across the state with available
renewable resources. More recently additional focus has been given to biomass,
geothermal, heat recovery and emerging technologies, with a higher percentage of
support for early development (through feasibility studies and design).
9 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Figure ES.2 Geographic Distribution and Type of Projects
The concentration of wind projects in the west and southwest, hydro projects in the south
and southeast, and biomass projects in the interior tend to reflect the availability of the
renewable resource available in defined regions of the state.
Economic Impacts
One of the fundamental concerns of policy makers, program administrators, and
participants is whether the investment of state funds in the development of renewable
energy through the REGRP is providing a net economic benefit. There are a variety of
regulatory and economic tests and approaches to assessing the benefits and costs of
renewable energy investments – and comparing these to alternative existing or
conventional non-renewable supply options.
After review and discussion of various approaches with AEA, we concluded the Total
Resource Cost (TRC) and Participant Cost Tests (PCT) were most appropriate in
addressing the priority questions related to this impact study. The TRC cost test results
for the construction portfolio are included in the Executive Summary. The benefit cost
analysis methodology is discussed in Section 3 and additional results are presented in
Section 4 of this report.
10 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
In our analysis we use the term “construction portfolio” to refer to a group of 62 projects.
Of these 43 projects were under construction or had construction grants in place during
2011 and 19 are complete and have 2011 operating data.3 All together, these projects
serve 77 unique rural and Railbelt communities (note, some projects serve multiple
communities). The program has established grants of $112 million to support these
projects, and leveraged $246 million in non-REGRP funds from the state and other
sources.
The benefit cost results for the construction portfolio include 2011 operating data from 19
of the 62 projects. The results for the other 43 projects are based on expected operational
savings and costs. In some cases early project operations have not met expectations –
due to a variety of factors highlighted in the subsector analysis section. However, even
when lower than expected project level performance is factored into the cost benefit
analysis, the overall portfolio remains cost effective – with total net benefits of more than
$500 million (Figure ES 3).
Figure ES.3 2011 Construction Portfolio Benefits and Costs with Operational Data
As indicated in Table ES-2, with the exception of solar, all of the resources are expected
to have net positive benefits. Over the course of their operating lifetimes, these projects
are expected to return more than $501 million in net benefits to Alaska’s economy,
returning almost $2 of value for every dollar invested.
3 Two projects, Kongiganak High Penetration Wind-Diesel Smart Grid project and Wrangell Hydro Based
Electric Boilers Construction project, were not included in this count based on absence of descriptive
performance data in the 2012 Alaska Renewable Energy Fund Status Report Appendix.
11 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Table ES.2 Construction Portfolio Benefits and Costs With Operational Results RE Resource Sector Total Project Cost Electricity Act/Proj Diesel Act/Proj Annual Electricity Annual Diesel Displaced Annual Natural Gas NPV Costs NPV Benefits Net Benefits NPV Benefit to Cost Ratio
$
Millions % % MWh gal x
1000
Mmbtu
x 1000
$
Millions
$
Millions
$
Millions
Biomass $27 34% 27,282 606 319 $49 $82 $33 1.68
Geothermal $1.5 34% 92 $4.6 $6.6 $2.1 1.46
Heat
Recovery $15 30% 54% 3,318 613 $20 $65 $45 3.23
Hydro /
Hydrokinetic $133 67% 78% 33,550 2,525 24 $192 $438 $246 2.28
Solar $0.3 0% 38% 42 3.2 $0.3 $0.3 ($0) 0.99
Wind $182 73% 60% 87,556 5,999 $234 $417 $183 1.78
REGRP
Admin $7.4
Total REGRP
Construction
Portfolio
(Actual)
$358 151,747 9,838 343 $508 $1,009 $501 1.99
Overall, our research confirms that the successful development of renewable energy
projects in Alaska is difficult, and is often more costly than elsewhere, but that there are
abundant opportunities to benefit the state economy and local communities due to the
high costs of providing diesel fuel and other non-renewable energy resources.
The benefits and costs results presented above account for the direct energy and
operational costs and savings. In addition, we have estimated the job related impacts, the
impact to the state and residents for communities participating the Power Cost
Equalization (PCE) Program, and the monetized value of environmental benefits (Tables
ES-3 and ES-4).
Table ES.3 Jobs and Avoided Carbon Emission Impacts
RE Resource Sector
Jobs Avoided Carbon Emissions
Person-
Years
# of
Jobs Tonnes/Year Project Lifetime
Savings ($ Millions)
Biomass 180 9 23,083 $2.4
Geothermal 18 0.9 930 $0.1
Heat Recovery 71 3.6 6,225 $0.7
Hydro / Marine 445 9 25,117 $6.8
Solar 0.3 0.0 33 $0.0
Wind 294 15 60,139 $6.4
Totals for REGRP in
Construction Portfolio 1009 37 115,527 $16.4
The development of renewable energy projects in communities participating in the PCE
program creates direct savings for residential customers and eligible public buildings that
12 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
participate in the PCE program, a reduction in the expenditures by the state to off-set
fossil fuel costs for these customers, and also savings for those customers who are not
eligible for the PCE program (primarily private, non-residential buildings) who benefit
directly from the lower levels of fossil fuel consumption.4
Table ES.4 Power Cost Equalization Impacts
Annual
Residential
Customer Savings
Annual Non-
Residential
Building Savings
Annual State PCE
Program Savings
Total
Annual
Project
Savings
Total
Annual
Project
Savings
MWh(s) $
Millions MWh(s) $
Millions MWh(s) $
Millions MWh(s) $
Millions
2011 Operational
REGRP Projects
(Actual)
421 $0.1 15,993 $8.2 6,233 $2.8 22,647 $11.2
2011 Operational
and Projects in
Construction
(Projected)
354 $0.3 35,739 $12.6 16,812 $5.1 52,905 $18
The job, environmental and PCE benefits further enhance the program’s overall value to
the state economy and communities participation in the REGRP. Section IV of this
report provides more detail on these analyses.
Lessons Learned
The development of each renewable energy resource sector in Alaska faces unique
challenges and opportunities. Section 5 of this report presents greater details – with
benefit cost ratios at the project level – for each resource sector. The studies and projects
funded to date through the REGRP, and the ongoing collection and monitoring of project
data – will provide a valuable resource to assist and inform future policy, project
investments and development.
4 An analysis of the impacts of REGRP projects on public buildings was not performed ba sed on the
limited visibility of the energy usage of this customer class in the 2010 Alaska Power Statistics Tables.
Including the benefits for public buildings in this analysis would be reflected largely as an increase in the
Annual State PCE Program Savings and a proportional decrease in the Annual Non-Residential Building
Savings.
13 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Table ES.5 Renewable Resources
Renewable Resource Lessons Learned and Sector Analysis
Wind Pages 52 – 58
Hydro Power and Hydrokinetic Energy Pages 59 – 65
Biomass and Landfill Gas Pages 66 – 71
Geothermal Pages 72 – 76
Heat Recovery Pages 77 – 81
Alaska’s Renewable Energy Market Development
Finally, the last section of this report discusses the REGRP in the broader context of
renewable energy market development conditions and trends in Alaska. The REGRP has
been a critical catalyst for activity across resources and stages of project developm ent.
Section 6 provides insights into the job and market growth that the REGRP and other
policy and market actors have helped to foster. As the market continues to grow the
human resource and knowledge base that helps Alaska to successfully develop renewable
energy projects and resources will become an increasingly valuable asset and driver of
economic development.
Conclusions
The REGRP has played an important role in supporting the development of renewable
energy systems in Alaska, serving both remote and Railbelt communities with significant
financial assistance. There is great potential for continued REGRP support to help reduce
energy costs in rural Alaska and to help the state tap more of its substantial renewable
energy resources. Looking forward, the REGRP has already created a solid foundation
for accelerating the development of renewable energy markets and infrastructure in
Alaska – and created a robust pipeline for near term project development.
This evaluation has two primary areas of focus: 1) To characterize the economic benefits
as estimated by the applicants for projects in the REGRP construction portfolio in 2011
and compare against the actual performance reported in 2011 and 2) Assess the REGRP’s
progress in meeting the stated priorities of the legislature in supporting cost-effective
projects on an equitable geographic basis and prioritizing projects in the communities
experiencing the highest energy costs.
In conclusion, despite the high costs and challenges associated with developing
renewable energy across the state, the REGRP is found to be cost-effective at both the
program and individual renewable resource sector level providing a significant net
benefit to the state. Underperformance, or alternatively, overestimation of the energy
savings in the application process, is relatively broad based and although this can be
attributed in part to the early startup performance of many projects in 2010 and 2011, is a
14 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
recommended area of continued focus by AEA. Improving the tracking of total system
costs and performance will contribute to future evaluation efforts, as well as assisting in
ongoing communications by program staff with industry stakeholders in establishing best
practices for project development.
The benefits of the renewable energy development in the state were characterized as
having primary economic benefits – avoided fuel, operation and maintenance costs, as
well as reducing expenditures through the Power Cost Equalization program – and
secondary benefits including avoided carbon emissions and increased employment in the
state. As the secondary benefits have direct implications to the state in creating jobs, as
well as improving air quality in Alaskan communities, creating discrete metrics for
capturing these benefits going forward will increase the value of the REGRP to the state
and the cost-effectiveness of individual projects.
The wide array of renewable resources, applicant types and geographic regions supported
by the REGRP represents an ongoing challenge to AEA in appropriately balancing
equitable distribution of funds and prioritizing projects in the communities experiencing
the highest energy costs. However, in this area as well, the REGRP is found to be
successful with two-thirds of funding being appropriated to communities with higher
costs of energy and a generally consistent funding success rate across different regions in
the state.
The AEA is well positioned to continue providing support through the REGRP and to
serve as an increasing knowledge base for lessons learned that will help improve future
project development and operations.
15 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
1. Introduction
Alaska is home to an abundance of renewable and non-renewable resources, but harsh
climate, limited infrastructure, a distributed population, and a short construction season
are common barriers to resource development. The costs and performance of renewable
energy systems are often impacted by local factors, with rural communities
disproportionately effected. However, even in the more populated regions of the state,
the delivery to market of renewable services will often differ from those suited to urban,
grid connected environments typical of most areas of the U.S.
Context and Background
Since 2008, the Alaska Renewable Energy Grant Recommendation Program (REGRP)
has provided support to utilities, independent power producers, and local governments,
including tribal councils and housing authorities for the development of renewable
energy projects. Administered by the Alaska Energy Authority (AEA), to date the
program has issued five solicitations, reviewed 558 grant applications, and received
appropriations totaling $177 million for 208 projects in the first four rounds, and
reimbursed grant recipients for $82 million in project costs.5 The solicitation for the fifth
round of program funding was issued in the summer of 2011 and recommendations for
$43 million of REGRP projects at two funding levels were presented to the legislature in
January, 2012. The governor approved $26 million of appropriations for the REGRP
projects in the State’s FY 2013 capital budget in May, 2012.
Alaska boasts an abundance of fossil and renewable resources that rival many countries,
but Alaskan consumers pay among the highest rates for heating and electricity in the
country—50% higher than the U.S. average6. According to the Energy Information
Administration, in 2012, Alaska ranked second in 2012 for high residential electricity costs
with an average price of 17.91 cents/kWh as compared to the national average of 11.52
cents/kWh. However, 159 rural villages or 85% of Alaska’s communities surpass 1st
ranked Hawaii’s $37.05 cents/kWh, highlighting the wide disparity of rates across the
state.7
Figure 1 illustrates the types of stakeholders and infrastructure that participate in and
support the REGRP. The applicants in the REGRP, as well as AEA staff, are the two
stakeholder groups with the most experience at all levels of the program, but clearly with
very different and important perspectives on its internal processes.
5 REGRP results presented by AEA at the Business of Clean Energy in Alaska Conference, April 2012.
6 Energy Information Administration, State Energy Data System (SEDS) Database
7 2010 Alaska Power Statistics Tables
16 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Figure 1.1 Alaska Renewable Energy Stakeholders and Program Infrastructure
As illustrated, the REGRP depends on a broad foundation of human resources and
industries to identify candidate projects and the potential funding sources.
Funding sources include the grants offered by AEA through the REGRP as well as other
sources of public and private capital.
RE Fund applications are generated by utilities, community, tribal and government
organizations, and from independent power producers or developers working with
communities. The REGRP differs from many other renewable energy incentive
programs in that it does not directly support or receive applications for individual
customer-sited projects.
Report Objectives
The objective of this report is to document the outcomes of the REGRP in terms of
quantifiable as well as qualitative metrics. These include energy production, project
benefits and costs (including offset fuel use), environmental impacts, operations and
maintenance issues and costs, job impacts, performance issues and other more difficult to
measure impacts such as increased awareness of and education about renewable energy,
and ancillary economic benefits to communities.
As a compliment to the REGRP Process Evaluations completed in March, 2012, the
Impact Evaluation is intended to be useful in helping program managers, planners, and
17 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
policy makers assess how well the program is functioning, and how effective and
efficient it is in meeting its stated objectives.
In general, process and impact evaluations help to foster and support a culture of ongoing
program improvement. As programs and initiatives mature and market conditions shift
there are always lessons that can be learned from measuring the program’s success and
applying these insights to future program planning.
Study Schedule and Team
AEA retained the Vermont Energy Investment Corporation (VEIC) in late 2011 to
conduct an independent program review for the REGRP with assistance from the Alaska
Center for Energy and Power (ACEP). This work is divided into a process evaluation,
and an impact evaluation. The process evaluation was started in mid-December of 2011
and was presented to AEA on March 23rd, 2012. The impact evaluation of the program
was started in March 2012, with a presentation of preliminary results to the Renewable
Energy Advisory Committee (REFAC) in June, and delivery of this report in August.
VEIC has a staff of 200 energy efficiency, conservation, demand response, smart grid,
and renewable energy professionals, and operates on an annual budget of approximately
$60 million. VEIC maintains an active Consulting Division staffed by 25 program design,
planning, review, analysis, and implementation experts. Our Consulting Division serves a
wide variety of public and private sector clients in 35 states, 6 Canadian provinces, and 5
European and Asian countries. Over the last 20 years, VEIC has been hired to design
programs from the ground up, to critique existing programs, and to recommend
improvements to literally hundreds of electric and gas efficiency programs. VEIC staff
have developed and critiqued regulatory filings, and filed and defended expert witness
testimony in more than 10 states on behalf of consumer advocates, regulators, utilities,
and environmental groups.
VEIC also has extensive direct experience with the implementation of efficiency and
renewable energy programs - through our successful operation of Efficiency Vermont
(the first statewide energy efficiency utility in the nation operated by VEIC by since
2000), and through the more recently launched Efficiency Smart Power Plant portfolio of
programs (on behalf AMP-Ohio and a collaboration of more than 40 of their member
municipal utilities), and as the implementation contractor for the Washington, D.C.
Sustainable Energy Utility (DCSEU).
VEIC has worked with regulators and utilities on renewable energy programs to define
eligibility requirements, solicitation mechanics, standard contract terms and conditions,
and project evaluation criteria. VEIC has written and reviewed grid supply competitive
solicitations and evaluated responses using detailed and quantitative scoring criteria. We
have recommended procurement design and implementation changes, in response to
changing regulatory and market conditions, and are considered to be among the most
experienced nationally in Renewable Energy Credit and Solar Renewable Energy Credit
(SREC) market design. Currently, VEIC implements renewable energy programs in New
Jersey, Vermont, and the District of Columbia.
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The Alaska Center for Energy and Power (ACEP) is an applied energy research program
at the University of Alaska Fairbanks, located within the Institute of Northern
Engineering and the College of Engineering and Mines. ACEP was formed in January,
2008 with the goal of meeting state and local needs for applied energy research by
working toward developing, refining, demonstrating, and ultimately helping
commercialize marketable technologies. ACEP has developed key partnerships with over
75 private companies, utilities, and native organizations throughout Alaska, as well as
national laboratories and research centers world-wide. In addition, ACEP leverages
resources from throughout the University of Alaska system through its model of building
integrated, interdisciplinary teams to meet the research needs of our clients. ACEP
currently manages over $15M in competitive research grants and contracts and has 20
active research projects.
VEIC and ACEP Team Roles
The Impact Evaluation was led by VEIC with significant technical, stakeholder outreach
and advisory support from ACEP.
The VEIC team, led by David Hill and Chris Badger, was responsible for the overall
direction, management and final results of the Process and Impact Evaluations. Leslie
Badger contributed to the impact evaluation cost effectiveness analysis.
The ACEP team, led by Gwen Holdmann and Julie Estey, provided the necessary context
for understanding the breadth of the Alaska renewable energy industry and have
contributed significant portions to the Market Development section of the impact
evaluation. The ACEP team was complemented by Dennis Witmer, who was responsible
for managing and reviewing the REGRP data and conducting analysis for impact
evaluation.
Organization of the Report
This report is organized into seven sections, including this Introduction. In the next
section, we describe our methodology. This includes both the development of a structured
set of evaluation criteria and results-oriented questions used to guide our analysis, an
analytical framework for processing program data, and input from AEA program
managers and industry stakeholders involved in the REGRP.
The third section, titled the ‘Program Participation and Demographics’, reviews the
success of the program in supporting a broad spectrum of renewable energy resources
and applicants, as well as meeting the stated priorities of the legislature in supporting
projects on an equitable geographic basis and prioritizing projects in the communities
experiencing the highest energy costs.
The fourth section, titled ‘Benefit/Cost Analysis Results’, evaluates quantitative
performance of the REGRP as it relates to providing a net benefit to the state, as well as
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in its ability to leverage non-state (match) funding for renewable energy projects.
Secondary benefits including PCE program impacts, jobs, and environmental benefits are
also reviewed, with an emphasis on the performance of operational projects in 2011.
The fifth section, titled the ‘Renewable Energy Resource Subsector Analysis’, will
review individual renewable resources in the state and identify lessons learned from
projects included in the 2011 construction portfolio. Documentation of both the actual
performance and sector barriers can help identify areas for improvement for future
projects, as well as guide focused improvements in both program and policy design.
The sixth section of this report includes a high level overview of the renewable energy
market in the State of Alaska, documenting the progress and ongoing efforts to spur
growth in the renewable energy sector. Although many of the market activities cannot be
solely attributed to the REGRP, documentation of the program contributions and
evolution of the market is key to mapping the progress of renewable energy in the state.
Finally, section seven presents our conclusions.
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2. Study Methodology
This impact evaluation is the second of two phases in the VEIC team’s evaluation of the
REGRP. Phase I consisted of the Process Evaluation, which was conducted during the
first quarter of 2012. As directed by AEA, our team used the research and results from
the Process Evaluation to inform and prioritize the tasks and approach for the Impact
Evaluation, which is the subject of this report. For this reason, much of the background
research and interviews conducted for the Process Evaluation were used to inform this
report.
Our study methodology for both the Impact and Process portions of the evaluation has
been designed to meet the twin objectives of conducting a rapid yet thorough assessment
of the REGRP program.
The process evaluation included an extensive number of interviews, in person meetings,
and on-line surveys with current and potential (future) program stakeholders. The impact
evaluation has involved more analysis of program databases, and a limited number of
telephone interviews and meetings with AEA program staff. Activities undertaken
during the impact evaluation have included:
Phone conferences with AEA to review process evaluation results and use these to
refine and identify priority areas of inquiry for the impact evaluation;
Review of program reports, databases, and analyses;
In-person and telephone interviews with select AEA program managers and staff;
A limited number of clarifying interviews with program participants and
stakeholders.
The development of a spreadsheet-based benefit cost analysis;
Analysis of the impacts for both construction and operational projects within the
REGRP portfolio using both projected and (for operational projects) available
data on actual performance;
Secondary research and interviews to provide information on renewable energy
market development in Alaska and to place the REGRP in a broader context of
statewide activity;
Drafting and reviewing preliminary impact evaluation results with the Renewable
Energy Advisory Committee; and
Preparation of the written Impact Evaluation Report (this document).
The remainder of this section provides detail on critical elements of the impact study
methodology.
Evaluation Priorities & Research Questions
When conducting any evaluation, it is critical to define both clear objectives as well as a
defined set of related research questions. For each area of inquiry, the VEIC team worked
with AEA staff to refine the impact evaluation priorities, the available data, the approach
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to answering key questions, and reviewing the analysis that has already been conducted.
As a result of this process, the team identified the following key questions:
What are the societal- and participant- perspective benefits and costs of the
REGRP?
Who has participated?
o What has been the technology and geographic mix?
o What has been the mix between funded projects in rural and urban
communities?
o To what degree have high cost of energy communities been served?
What are the projected and actual energy savings, and how well have these
matched? How much impact has any discrepancy had on overall program cost -
effectiveness?
How much total external (match) funding has the state’s investment in the
REGRP leveraged?
What are the impacts of the REGRP on the Power Cost Equalization (PCE)
program?
What are the environmental and job related impacts of the REGRP?
How many projects have moved successfully from assessment to construction (is
a good pipeline being built?)
Have there been resource assessment projects that have helped identify and avert
the construction of non-cost effective projects?
What are the lessons learned in each renewable resource category as they relate to
the barriers and opportunities for project development – giving special attention
the unique obstacles and market conditions faced in much of the state?
Using these questions as a guide, our team focused on review of datasets, existing
analyses, select interviews, and the building of a benefit cost analysis spreadsheet with
the goal of providing useful insights on program and project performance to date for both
program managers as well as current and future participants.
Data Sets and Previous Analyses
Our team worked closely with AEA to identify existing data sets and prior analyses,
including the important and valuable work that has been conducted by the Institute of
Social and Economic Research (ISER) to support program data tracking, reporting and
analysis. The databases and analyses we reviewed include the following. Unless
otherwise noted, those appearing in bold represent the primary data sources for the
benefit cost analyses presented in this report.
Resources:
2012 RE Fund Status Report & Appendix
Alaska Renewable Energy Fund Grant Program: How it Works and Lessons
We’ve Learned
2009 & 2011 Alaska Renewable Energy Atlas
2010 Alaska Energy Pathway
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AEA REGRP Database queries
EIA Energy Data for Alaska
The REGRP encompasses a wide array of types of projects (upgrade, new, expansion,
transmission) with multiple funding sources and applicant types. This diversity makes
the consistency of the reporting on total project costs (feasibility, transmission, etc),
savings and operational performance critical for the accuracy of reporting performance of
the program. In this evaluation, efforts were made to balance the need for confirming the
reported costs and savings against secondary sources, while managing the scope of the
evaluation. Continued efforts on improving the tracking of costs and performance data
will provide greater accuracy in reporting, as well as insights in to improving the cost-
effectiveness of the projects and the program.
Interviews
Although analyzing objective performance metrics is an important aspect of conducting a
comprehensive impact evaluation, engaging primary stakeholders, including program
managers, project developers and other key parties, provides a better framework for
understanding the REGRP and the broader context of renewable energy development in
Alaska. For the REGRP impact evaluation, interviews were conducted with:
Individual interviews with AEA Program Managers to review relevant project
performance, solicit insights related to corresponding market challenges and
opportunities, and to catalogue ongoing program efforts to improve the
performance of existing and future projects within their respective technology
areas.
Additional interviews with other AEA staff centered on obtaining program
documentation, including both data for REGRP applications through the first five
rounds and cost and performance data for projects in AEA’s construction
portfolio outside the REGRP. Since the initiation of the Process and Impact
evaluation, there have been continued efforts by AEA to enhance consistency of
data management within and between programs, focused on more streamlined and
compatible processes to enhance tracking at both the individual and overall
program level. However, for the purpose of the analysis described in this report,
we were limited to data pulled from a number of existing sources including the
REGRP application database, the AEA/ISER RE Fund Performance Report, the
2012 RE Fund Status Report and individual program manager performance
tracking.
A smaller subset of industry stakeholders, including project developers. These
supplementary interviews were pooled with the extensive stakeholder interviews
conducted for the Process evaluation and described in that report.
In addition to direct interviews and conversations, significant indirect support was
provided by the prior work completed by ISER on behalf of AEA. Key inputs for the
evaluation of both the costs and benefits of individual projects were directly supported
through their existing database, supplemented by additional industry research.
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Benefit Cost Analyses
One of the fundamental concerns of policy makers, program administrators, and
participants is whether the investment of state funds in the development of renewable
energy through the REGRP is providing a net economic benefit. There are a variety of
regulatory and economic tests and approaches to assessing the benefits and costs of
renewable energy investments – and comparing these to alternative existing or
conventional non-renewable supply options.
After review and discussion of various approaches with AEA, we concluded the Total
Resource Cost (TRC) and Participant Cost Tests (PCT) were most appropriate in
addressing the priority questions related to this impact study. The TRC test compares the
societal level benefits and costs of the projects and helps to answer the question of
whether the REGRP is making investments that serve the general best interests of the
state’s economy. The PCT results are helpful in illustrating how attractive participation
in the program is for current and potential future applicants.
These tests provide good insight to the fundamental questions of the nature (positive or
negative) and magnitude of the economic benefits to the state and to program
participants. The following table summarizes the elements included in each of these cost
tests, followed by two illustrative examples.
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Table 2.1 Summary of Costs an d Benefit Tests Applied to Impact Evaluation
Total
Resource
Cost Test
Participant
Cost Test
Notes:
Benefits:
Electric
Savings Value of electric savings for remote communities based on
the avoided local diesel fuel costs as estimated by ISER.
For Railbelt communities the value of electric savings is
based on avoided electric costs. Note for this analysis the
PTC uses total offset local fuel costs – in many cases differ
from local retail rates due to the Power Cost Equalization
(PCE). See discussion of the PCE impacts in the
Benefit/Cost Analysis results section for further details.
Diesel Fuel
Savings
Other Fuel
Savings Example: Anchorage landfill project benefits offset natural
gas
Non-Energy
Benefits NA NA
In this analysis non-energy benefits (such as improved
community services, jobs or environmental impacts) are
not included in the benefit cost ratios. We do estimate -
and report separately from the benefit cost tests – the job,
avoided carbon emission, and PCE program impacts of the
REGRP.
Costs:
Total Project
Capital Costs -
Based on available program database information on
project construction costs. In some cases these include
pre-construction (e.g. feasibility or design costs) and in
other cases only construction phase costs are captured.
REGRP
Program
Funds
-
For participant test reduce local costs
Other Federal,
State or Non-
Local Funds
-
Although federal tax credits, including both the
Performance Tax Credit and the Investment Tax Credit are
applicable in the participant test, they were not included in
this analysis due to the absence of clear documentation at
an individual project level.
Local Funds - For the PCT, the total capital costs minus all other known
sources is equal to local funds invested in the project.
REGRP
Program
Administration
Costs
-
Included in the portfolio level analysis for the TRC.
Operations
and
Maintenance
Includes gross operations and maintenance costs for RE
systems – at this time does not capture off-set of O&M for
alternative systems. O&M estimates also include increase
in biomass fuel consumption.
The TRC and the PCT both estimate the discounted present value of the projects over
their expected operating lifetimes.8 This means that the anticipated stream of costs and
benefits are discounted to present values to account for the time value of money – and
also to permit for escalation of costs for offset fuels or for operations and maintenance
costs. The TRC and PCT project level benefit cost ratios are calculated as follows.
8 A discount rate of 3% is assumed for both the Total Resource Cost Test and the Participant Test.
TRC Benefit/Cost Ratio = Present Value Annual Energy Savingsproject life
0
Total Project Capital Costs+ Present Value Annual Operations and Maintenanceproject life
0
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The PCT is similar in structure, but as indicated above, costs are limited to the local
portion of the project development costs – subtracting the REGRP and other non-local
funds from the total project capital cost.
An example of the TRC and PCT project level benefit cost analysis is presented in the
following text box.
Our impact evaluation includes a portfolio (as well as project) level analysis. The TRC
test for the portfolio includes program administration costs for the REGRP. The included
program administration costs represent all of the AEA’s program administration costs for
the REGRP, including projects that are in the feasibility or design stages as well as those
receiving construction funding.
Although not included in this impact evaluation, the levelized cost of energy is another
metric that we recommend AEA begin to track and report, in addition to maintaining
information on the benefit/cost ratios that we have included in this analysis.
The levelized cost is based upon the initial capital costs, operating costs, and the total
expected output of a system over its lifetime. In its simplest form:
The levelized cost of energy is most commonly presented in $/kWh or $/gallon of
avoided fuel, and for this reason it can easily and directly be compared to the cost of
existing or projected alternatives. In many instances, this simple comparison of the cost
of renewable energy to alternative provides an easily understood metric for judging
project cost effectiveness.
The drawback is that, in contrast the to the TRC and PCT tests that we have applied, the
levelized cost of energy does not capture the relative scale of benefits and costs
associated with each project, and therefore is less helpful in assessing the total net
economic impacts.
Unalakleet Wind Farm Construction Project:
TRC Benefit/Cost Ratio =$7.8 𝐿𝑖𝑙𝑙𝑖𝑛𝑛 (𝐿𝐿𝑉 𝐹𝑟𝑐𝑙 𝑎𝑛𝑐 𝐿&𝐿 𝑆𝑎𝑟𝑖𝑛𝑐𝑟 )
$4.1 𝐿𝑖𝑖𝑙𝑖𝑛𝑛 (𝐿𝐿𝑉 𝑆𝑛𝑟𝑎𝑙 𝐿𝑟𝑛𝑖𝑐𝑐𝑟 𝐼𝑛𝑟𝑟𝑎𝑙𝑙𝑐𝑐 𝐶𝑛𝑟𝑟 +$0.7 𝐿𝑖𝑙𝑙𝑖𝑛𝑛 (𝐿𝐿𝑉 𝑛𝑐 𝐿&𝐿) = 1.64
PCT Benefit/Cost Ratio =$7.8 𝐿𝑖𝑙𝑙𝑖𝑛𝑛 (𝐿𝐿𝑉 𝐹𝑟𝑐𝑙 𝑎𝑛𝑐 𝐿&𝐿 𝑆𝑎𝑟𝑖𝑛𝑐𝑟 )
$0.9 𝐿𝑖𝑖𝑙𝑖𝑛𝑛 (𝐿𝐿𝑉 𝐿𝑛𝑐𝑎𝑙 𝑆ℎ𝑎𝑟𝑐 𝑛𝑐 𝐼𝑛𝑟𝑟𝑎𝑙𝑙𝑐𝑐 𝐶𝑛𝑟𝑟 +$0.7 𝐿𝑖𝑙𝑙𝑖𝑛𝑛 (𝐿𝐿𝑉 𝑛𝑐 𝐿&𝐿) = 8.83
Levelized Cost of Energy = Present Value of Capital and Operating Costsproject life
0
Present Value Annual Energy Savingsproject life
0
PCT Benefit/Cost Ratio = Present Value Annual Energy Savingsproject life
0
Local Project Capital Costs+ Present Value Annual Operations and Maintenanceproject life
0
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Federal incentives for renewable energy projects were not included in the cost benefit
analysis due to the lack of visibility in the reporting documentation from individual
projects. Although federal grants and incentives are treated as a transfer payment and not
included in the TRC, they can be applied in the Participant Test in reducing the effective
cost of the project. As few of the projects are for private utilities or independent power
producers, who have an effective tax basis, the impact on the overall results of the
REGRP are limited. However, federal incentives for applicants paying federal taxes (e.g.
independent power producers and private utilities) can be a significant factor in
increasing cost-effectiveness of associated projects. Two incentives are currently
applicable to qualifying REGRP projects:
The federal renewable electricity production tax credit (PTC) is a per-kilowatt-
hour tax credit for electricity generated by qualified energy resources, including
wind, biomass and geothermal (¢2.2/kWh) and landfill gas, municipal solid waste,
hydro, hydrokinetic, tidal, wave and ocean thermal energy (¢1.1/kWh).
Renewable energy projects under construction prior to December 31, 2011 and
qualifying for the PTC, could opt to receive a federal business investment tax
credit or grant in lieu of the tax credit for 30% of the total installed cost of the
system.9 The expiration of the PTC for wind already appears to have had a
chilling effect on the market in the United States resulting in approximately 50%
reduction in the expected annual increase in installed wind capacity between 2009
and 2010.10 Industry advocacy groups like the American Wind Energy
Association (AWEA) indicate that creating long-term stability for project
developers is critical for sustainable growth of the renewable industry.
Solar electric (PV) and solar thermal qualify for the federal business investment
tax credit (ITC) of 30% of the total installed cost of the system until December
31, 2016. Similar to the PTC, solar energy projects that were under construction
prior to December 31, 2011 and qualified for the ITC, could opt to receive a
federal grant in lieu of the tax credit.
An additional metric used in this analysis to track REGRP project performance is their
system Capacity Factor (CF). The net capacity factor of a project is the ratio of the
actual output of a power plant over a period of time and its potential output if it had
operated at full nameplate capacity during that same time period. Although not tracked
uniformly across programs, capacity factor can be an effective measurement of an
individual project’s success in meeting its predicted performance, as well as provide a
universal metric for comparing multiple projects of different scale both within an
individual renewable sector, and across sectors.
9 Database of State Incentives for Renewables and Efficiency (DSIRE), Renewable Electricity Production
Tax Credit (PTC), http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US13F&re=1&ee=1
10 American Wind Energy Association (AWEA), Production Tax Credit, April, 2011.
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3. Program Participation and Demographics
Summary
The Alaska Renewable Energy Grant Recommendation Program (REGRP) was
established in 2008 to support the development of renewable energy projects and to
reduce the impact of the high cost of energy for rural communities. In this section we
will review the diversity of the 558 REGRP applications evaluated by AEA during the
five rounds, as well as the 208 renewable energy projects that received funding
appropriations of $177 million through the first four rounds. These projects have
impacted 77 unique Alaskan communities, and helped develop renewable energy
resources across the state with $135 million in state funding granted under the REGRP
and other state funding.
Table 3.1 REGRP Participation and Funding by Round
Round I - IV V Total
Applications Received 461 97 558
Projects Funded 208 19 227
Grants in Place 180 5 185
Grants Completed 38 0 38
Grants Cancelled 14 0 14
Amount Requested ($M) $1,094 $133 $1,227
AEA Recommended ($M) $239 $43 $282
Appropriated ($M) $177 $26 $202
Cash Disbursed ($M) $100 $8 $108
As part of the analysis we will:
Review performance of the REGRP in meeting its primary goals of supporting
high cost of energy communities and achieving an equitable distribution of funds
across the state.
Assess the funding success of applicants, tracking awards by type of applicants,
statewide regions, and type of resource.
Analyze and discuss the different stages of renewable energy project
development.
Although all of the primary renewable energy resources were represented in the
application pool during the 5 rounds of funding, approximately 80% were for hydro,
wind and biomass (Figure 33.1).
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Figure 3.1 Appropriated Funds by Resource (Rounds I-IV)
Applicants requested over $1.2 billion in funding support through the REGRP, ranging
from the largest individual request of $79 million in Round 1 of the REGRP11, to the
smallest request of $15,000.This wide disparity in project funding level and
corresponding scope also highlights the capacity of larger, better capitalized applicants to
obtain alternative funding sources for projects despite the funding limitations set for
individual projects. 12
Supporting High Cost of Energy Communities and Projects in
Alaska
During the first four rounds of the REGRP, a wide mix of renewable energy projects
ranging in both resource type and stage of development (feasibility, design and
11 The largest request was for GVEA’s Eva Creek wind farm, which ultimately received $2 million in
Round 1 and capitalized the balance through financing.
12 Construction projects on the Railbelt, Juneau, Sitka, Ketchikan, Wrangell, and Petersburg electrical grids
are limited to $4 million in grant funding and other areas of the state to $8 million.
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construction) have been supported across the state. The heavy concentrations of wind in
the west and southwest, hydro in the south and southeast, and biomass in the interior tend
to reflect the availability of the renewable resource available in defined regions of the
state.
Figure 3.2 Distribution of REGRP projects across Alaska
The REGRP’s rule of thumb of obligating 20% of available funding to support the
reconnaissance, feasibility and design of renewable energy projects has complemented a
broader effort by AEA, the Denali Commission, the University of Alaska and other
organizations to map the state’s options for meeting the goal of generating 50% of its
electric power from renewable resources by 2025. Individual feasibility studies – notably
AEA’s MET tower loan program for wind, as well as broader renewable resource
analyses completed for the AEA Alaska Energy Pathway report have contributed to the
opportunities for individual communities to identify and invest in the development of
local renewable energy resources to reduce dependence on more expensive, non-
renewable sources of energy.
Approximately two thirds of projects appropriated funding in the first four rounds of the
REGRP were in communities with reported energy costs above $0.30 per kWh. The
highest percentage of funding was for wind energy projects, with 85% of total REGRP
appropriations for wind projects in the state invested in higher cost of energy
communities. The investment in prior feasibility studies for wind applications, leading to
“shovel ready” construction projects likely led to the strength of this sector in the early
rounds of the REGRP.13
13 Interviews with AVEC highlighted the immediate opportunity created for early wind projects with the
establishment of the REGRP in 2008.
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Figure 3.3 REGRP Project Funding by Technology and Community Cost of Energy
REGRP Support for a Broad Mix of Applicants and Renewable
Resources
The funding of REGRP projects during the first four rounds generally reflects the
maturity of renewable energy technology sectors coupled with the existing knowledge
base for developing cost-effective projects in communities across the state with available
renewable resources. More recently additional focus has been given to biomass,
geothermal, heat recovery and emerging technologies, with a higher percentage of
support for early development (through feasibility studies and design).
In the figures below, a comparison is made between the amount of funds requested versus
the funds ultimately appropriated for the various renewable resources, as well as for
applicant types. Based on these values, a funding success rate is the ratio between these
two funding levels. Although there is a significant funding disparity between the various
renewable resources, which generally reflects the percentage of projects types applying
for construction funding, there is a relatively even distribution of funding success for
individual applicants within the same group.
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Figure 3.4 Funding Success by Technology Type – Requested vs. Appropriated
More notable is the success of different applicant types in moving from an application to
the REGRP to an appropriation through the state legislature. The various stages of the
REGRP process was discussed in greater detail in the Process Evaluation, but at the
highest level reflects four general stages:
1. AEA evaluation and ranking
2. AEA & Renewable Energy Fund Advisory Committee recommendations to the
state legislature
3. Appropriation by the legislature
4. Final budget approval by Governor
The ranking of projects by AEA generally reflects the final appropriations, but changes in
budget, regional distribution of funding, and other factors has occasionally impacted the
final prioritization of funding and awards by the legislature.
Some applicants have navigated this process better than others, based primarily on
experience of the applicant, as well as the cost-effectiveness of the proposed project.
Below are the results of a comparison of the total amount of REGRP funding received by
applicant types against the funding requested in its original applications. Although this
review of applicant success is not comprehensive, it highlights the wide disparity in
funding success rates and the particular success of AVEC, as an individual applicant, in
receiving REGRP support for 78% of its funding requests.
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Figure 3.5 Funding Success by Applicant Type – Requested vs. Appropriated
Tracking Projects through Stages of Development
Guidance established for the REGRP recommends that 20% of
the funding be allocated to reconnaissance, feasibility and
resource studies and 80% be awarded to final design, permitting
and construction projects. This funding allocation is designed to
support the early development of renewable energy projects
across Alaska, creating a pipeline of projects for future
construction. Although individual projects move from
recommendations to final appropriations by the legislature and
approval of the budget by the Governor, the REGRP has largely
succeeded in balancing the mix of projects funded, with 18% for
reconnaissance and feasibility, 8% for design and 74% for
construction.14
Projects typically proceed from the grant award process, through the feasibility phase, to
design, procurement, construction, completion, and commissioning. However, as the
14 REGRP results presented by AEA at the Business of Clean Energy in Alaska Conference, April 2012.
Figure 3.6 Funding by Phase
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application process does not restrict funding for specific phases, the identification of the
project phase and status is tracked by AEA through its grant administration process.
In an effort to characterize the performance of the funded projects by phase, each project
was given a specific status value reflected in the figure below. Based on a review of the
most recent reporting by AEA in the annual RE Fund status report15 and AEA REGRP
program documentation, wind projects represent the largest portion of projects completed
or nearing completion, while hydro projects encompass the greatest share of projects in
the design phase (due to the typical length of a hydropower project development cycle).
Figure 3.7 Number of REGRP Projects by Project Status and Renewable Resource
Although only 35% of REGRP projects are categorized within the design to construction
phase, they represent nearly 60% of the total project funding appropriated during the first
four rounds (82% of the first five rounds). This can be expected, as construction is
almost always the most costly phase for an individual project.
15 Grant status for individual projects was last reported in the 2012 Alaska Renewable Energy Fund Status
Report in January, 2012 and is the basis for this analysis. It should be noted that Figure 3 .7 reflects the
current status of projects and not the cumulative funding for specific project types noted in Figure 3.6.
34 Alaska Energy Authority
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Table 3.2 Multi-phase REGRP Projects
Biomass 4
Geothermal 2
Hydro 2
Transmission 1
Wind 6
Grand Total 15
Because some projects completed one or more phases of development outside of the
REGRP process, it can be difficult to develop a comprehensive picture that includes all of
the true project costs from resource evaluation through completion. In this case, the
benefit to cost analysis as presented in the following section may be skewed, representing
lower than actual total project costs.
A review of the 208 funded projects in the first four rounds found 15 individual projects
moved from pre-construction phases to the construction phase. This total, representing
approximately 8% of the REGRP projects, does not reflect non-REGRP support for
project construction received through AEA, the Denali Commission or other external
funding sources. Increasing the ability to track and report on projects across the various
phases of project development should be a priority for future project and program
tracking metrics.
A significant finding is that there are a total of 17 feasibility projects that resulted in a
determination of no viable/cost-effective project. Nonetheless, the resultant insights from
mapping renewable resources across the state while simultaneously avoiding more costly
investment of investing construction funding in non-viable projects has been well
balanced. The value of the information generated from the projects that did not progress
to construction may be underestimated. These results are key to insuring that continued
improvements to project designs or siting can be made, raising the cost -effectiveness of
future proposals if lessons learned are applied prudently.
35 Alaska Energy Authority
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4. Benefit/Cost Analysis Results
Summary
Through the first four rounds of funding 62 projects have moved to the construction or
operational phase. In this section we review the benefit cost analysis results for this
cohort of projects. The analyses and results include the following:
The benefit cost results for all 62 projects based upon the costs and projected
energy savings contained in the program data base and project applications.
The benefit cost results for 19 operational projects reflecting 2011 calendar year
operational costs and savings. In many cases, the energy savings and operations
during 2011 are less than projected and consequently the benefit cost ratios are
reduced. Note also that the operational benefit cost results assume that the
operational and energy savings achieved in 2011 will be maintained throughout
the project lifetime. In many cases it is reasonable to expect that operations and
energy savings will improve – coming closer to the projected energy savings – as
operational and start up issues are resolved.
The Benefit/Cost test results are presented for the Total Resource Cost (TRC) test
and for the Participant Test (PCT). The TRC test compares the societal level
benefits and costs of the projects and helps to answer the question of whether the
REGRP is making investments that help to serve the general best interests of the
state’s economy. The Participant Test results are helpful to illustrate how
attractive participation in the program is for current and potential future
applicants. The technical details for each test are addressed more specifically in
the methods section of this report.
An analysis and discussion of the total investments leveraged by the State’s
investment of funds in the REGRP program.
A discussion and analysis of the aggregate impact of the program on the power
cost equalization (PCE) program.
Discussion of the aggregate portfolio level job and environmental impacts from
the REGRP’s construction and operational projects.
The REGRP encompasses a wide array of types of projects (upgrade, new, expansion,
transmission) with multiple funding sources and applicant types. This diversity makes
the consistency of the reporting on total project costs (feasibility, transmission, etc),
savings and operational performance critical for the accuracy of reporting performance of
the program. In this evaluation, efforts were made to balance the need for confirming the
reported costs and savings against secondary sources, while managing the scope of t he
evaluation. Continued efforts on improving the tracking of costs and performance data
36 Alaska Energy Authority
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Impact Evaluation
will provide greater accuracy in reporting, as well as insights in to improving the cost-
effectiveness of the projects and the program.
Construction Portfolio – Projected Benefit Cost Results
Based on the projected costs and benefits – the construction portfolio for the REGRP
(which includes 19 projects that have been operational in 2011, and 43 that have received
construction grants) – originally was expected to provide more than $531 million in
present value net benefits for Alaskans over the life of the projects.
Figure 4.1 2011 Construction Portfolio Benefits and Costs for REGRP Projects
The projects are primarily rural based offsetting the extremely high cost of diesel
generation and represent the broad spectrum of renewable energy resources in the state.
The $7.4 million in REGRP administration costs are a small fraction, slightly over 1%,
of the cumulative costs of the project installed and operation and maintenance costs.
37 Alaska Energy Authority
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Table 4.1 Benefits and Costs for the REGRP 2011 Construction Portfolio RE Resource Sector Total Project Cost Annual Electricity Annual Diesel Displaced Annual Natural Gas NPV Costs NPV Benefits Net Benefits NPV Benefit to Cost Ratio ($ Millions) (MWh) (gal x
1000)
(Mmbtu
x 1000) ($ Millions) ($ Millions) ($ Millions)
Biomass $27 27,282 718 319 $52 $92 $40 1.77
Geothermal $2.4 164 $9.7 $12.5 $2.8 1.29
Heat
Recovery $15 4,352 681 $22 $71 $49 3.21
Hydro /
Hydrokinetic $131 35,093 2,618 24 $190 $435 $245 2.29
Solar $0.3 42 4.8 $0.3 $0.3 ($0.0) 0.99
Wind $182 90,102 6,371 $236 $438 $202 1.85
REGRP
Program
Admin $7.4
REGRP
Construction
Portfolio
(Est)
$357 156,870 10,556 343 $518 $1,049 $531 2.03
Operating Portfolio – Benefit Cost Results Reflecting Early
Operational Data
Of the construction portfolio, 19 projects now have early operational experience and data.
Therefore, we also conducted a benefit cost analysis for this sub-set of operational
projects including available reported data on energy savings and costs.
The benefit cost results based on the early experience of the operating projects is less
favorable than the construction portfolio results based on projected costs and savings.
This clearly indicates, that at least in the early phases of project operations and startup –
the projects have “under-performed” compared to the expectations in the project
application and in the program database.
When the actual savings and costs for operational projects are analyzed the total present
value benefits are greater than the total present value costs by a factor of 1.7 – with the
portfolio expected to provide more than $114 million in present value net benefits for
Alaskans over the life of the projects.
38 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
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Figure 4.2 Benefits and Costs of the 2011 Operating Portfolio of REGRP Projects
It should be noted that performance for many projects can be expected to improve after
the initial commissioning, as the projects develop more operational experience, reduce
downtime and in some cases fully bring an individual system up to operational capacity.
During interviews and in reviewing RE industry presentations and evaluations, it was
apparent that AEA Program Managers and project operators were aware of specific cases
of underperformance and working to address many of the issues that have led to lower
than expected performance numbers. Ongoing tracking of project performance, ideally
even beyond the stipulated requirement of up to 5 years after commissioning, will
provide insights for continued improvements on renewable energy project design,
development and deployment.
Below is an example of a REGRP wind project that has underperformed in electricity
generation, but also installed under budget. The significant value placed on the benefits
of offsetting diesel generation outweighs the project savings associated with a lower
installed cost, affecting both economic impacts to both the program as well as to the
community.
Table 4.2 As Built Versus Projected Costs and Operating Project Performance
Quinhagak Wind Farm Construction
Total Project Cost Annual Electricity
($ Millions) (MWh)
Estimated $4.8 649
Actual $3.8 409
Difference -22% -37%
39 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Table 4.3 Total Resource Cost Versus Participant Cost Test
Quinhagak Wind
Farm
Construction
Total Resource Cost Test Participant Cost Test
NPV
Costs
$ Millions
NPV
Benefits
$ Millions
TRC
Benefit to
Cost
Ratio
NPV
Costs
$ Millions
NPV
Benefits
$ Millions
TRC Benefit
to Cost
Ratio
Estimated ($5.2) $5.1 0.98 ($0.5) $5.1 11.17
Actual ($3.9) $3.2 0.81 ($0.8) $3.2 3.92
Difference -24% -37% -18% 79% -37% -65%
Table 4.4 Benefits and Costs for the REGRP 2011 Operating Portfolio RE Resource Sector Total Project Cost Electricity Act/Proj% Diesel Act/Proj% Annual Electricity Annual Diesel Displaced Annual Natural Gas NPV Costs NPV Benefits Net Benefits NPV Benefit to Cost Ratio ($ Millions) % % (MWh) (gal x 1000) (Mmbtu x 1000) ($ Millions) ($ Millions) ($ Millions) Biomass $ 3,898,109 34% 42 $5.6 $3.9 $10 0.70
Geothermal $ 1,026,000 34% 37 $3.1 $3.2 $6.4 1.03
Heat
Recovery $ 2,004,225 30% 54% 442 57 $7.1 $9.2 $16 1.31
Hydro /
Hydrokinetic $ 37,633,019 67% 78% 5,344 437 $79 $127 $206 1.61
Solar $ 193,600 0% 38% 0.9 $0.2 $0.2 $0.4 1.14
Wind $ 51,248,202 73% 60% 17,472 1,183 $62 $127 $188 2.06
REGRP
Operational
Projects $ 96,003,155 68% 56% 23,089 1,756 $157 $270 $114 1.73
Construction Portfolio – Including Operating Data
The first set of Construction Portfolio benefit cost results presented in this section were
based on projected savings and costs. In this sub-section we investigate the impact on the
portfolio’s benefit cost results if the early results from operating projects are included,
and assumed to be representative of the operations and savings over the life of this sub-
set of projects.
40 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
As expected, the benefit cost results for the construction portfolio that reflects the early
under-performance of operating projects is less favorable than the construction portfolio
results based on projected costs and savings.
Figure 4.3 2011 Construction Portfolio Benefits and Costs with Operational Data
When the actual savings and costs for operational projects are included in the analysis the
overall construction portfolio remains cost effective with total present value benefits of
$1,009 million and total present value costs of $508 million. Understanding which
project types and applications have the greatest potential risks of underperformance
improves the program’s ability to track specific areas of project development and
operations, as well tailoring assistance to assure performance is met moving forward.
These early efforts in evaluating program and sector level performance can help in
avoiding more broad based underperformance of the construction and preconstruction
projects.
41 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
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Table 4.5 Benefits and Costs for the 2011 Construction Portfolio with Operating Data RE Resource Sector Total Project Cost Electricity Act/Proj Diesel Act/Proj Annual Electricity Annual Diesel Displaced Annual Natural Gas NPV Costs NPV Benefits Net Benefits NPV Benefit to Cost Ratio ($ Millions) % % (MWh) (gal x 1000) (Mmbtu x 1000) ($ Millions) ($ Millions) ($ Millions) Biomass $27 34% 27,282 606 319 $49 $82 $33 1.68
Geothermal $1.5 34% 92 $4.6 $6.6 $2.1 1.46
Heat Recovery $15 30% 54% 3,318 613 $20 $65 $45 3.23
Hydro / Hydrokinetic $133 67% 78% 33,550 2,525 24 $192 $438 $246 2.28
Solar $0.3 0% 38% 42 3.2 $0.3 $0.3 ($0) 0.99
Wind $182 73% 60% 87,556 5,999 $234 $417 $183 1.78
REGRP Admin $7.4
REGRP Construction
Portfolio (Actual) $358 151,747 9,838 343 $508 $1,009 $501 1.99
Operating Portfolio - Participant Test – Benefit Cost Results
The results presented above are based on the societal perspective and use the total
resource cost test as described in the methods section of the report. This section reviews
the participant test benefit costs results for the Operational Portfolio – accounting for
both the initially projected savings and costs, and based on the early operational data.
It is important to consider the participant test results – since this provides insights into
how attractive the program appears to current and potential applicants. It also provides
an indicator of whether the program may have opportunities to support a greater number
of projects by reducing the grant dollars given to individual applicants – while still
maintaining very favorable participant perspective economics – and thereby allowing a
greater number of grants in each funding cycle.
As REGRP projects often receive funding from multiple sources, including REGRP,
federal, external organizations (e.g. native non-profits), consistency of reporting on total
project costs is critical for the accuracy of reporting performance of the program. In this
evaluation, efforts were made to balance the need for confirming the reported costs and
savings against secondary sources, while managing the scope of the evaluation.
42 Alaska Energy Authority
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Impact Evaluation
Figure 4.4 Participant Cost Test for 2011 Operating Portfolio
Table 4.6 Participant Cost Test Results for 2011 Operating Proje cts
RE Resource Sector NPV Costs NPV
Benefits Net Benefits NPV Benefit to
Cost Ratio
($ Millions) ($ Millions) ($ Millions)
Biomass $1.8 $3.9 $2.1 2.12
Geothermal $2.6 $3.2 $0.6 1.22
Heat Recovery $5.6 $9.2 $3.7 1.66
Hydro / Hydrokinetic $64 $127 $63 1.98
Solar $0.0 $0.2 $0.2
Wind $35 $127 $92 3.64
REGRP Operational Projects $109 $270 $161 2.48
Although the overall operational projects participant benefit to costs ratio is 50% higher,
this is dominated by the larger projects that have significantly more non-state funds
invested versus the smaller, less capitalized rural projects. Individual project
performance can range up to 8.83 in the case of the Unalakleet wind project, where the
REGRP funding covered over 90% of the project cost.
Construction Portfolio – Leveraged Investment
Through five rounds the REGRP has recommended $282 million in funding, with $202
million appropriated. Of the projects in construction, the $112 million in REGRP
appropriations and $23 million in other state funds has leveraged a further $223 million
of investments.
The non-state investments encompass a wide variety of sources including federal grants –
most notably through the Denali Commission, individual utility funded investments
through debt and equity, and regional contributions through either community in -kind
funding matches, as well as grants from regional tribal organizations.
43 Alaska Energy Authority
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Investments in these renewable energy projects reflect deliberate efforts by organizations
and communities to spur project development with goals of reducing the high cost of
energy for communities, creating jobs and reducing the flow of money out of
communities and the state from non-renewable energy sources.
Table 4.7 REGRP Funding Sources – State and Leveraged Funds
RE Resource Sector REGRP
Funding
Other State
Funding
Non-State
Funds
Ratio of
Non-
State to
State
Funds
State Funding
to Total
Project Cost
(Rural)
($ Millions) ($ Millions) ($ Millions) %
Biomass $16 $0.9 $10 0.60 87%
Geothermal $0.9 $0.6 0.60 63%
Heat Recovery $7.0 $7.8 1.12 45%
Hydro / Hydrokinetic $31.2 $17 $85 1.75 37%
Solar $0.3 $0.01 0.04 97%
Wind $56 $4.8 $121 1.97 67%
REGRP Construction
Portfolio $112 $23 $223 1.66 52%
State investment, including both REGRP appropriations and other state funding,
represented nearly 52% of the total project costs in rural areas during Rounds 1 -4,
whereas only 7% of project costs in Railbelt projects were supported through state
funding.16
Figure 4.5 Rural and Railbelt REGRP Appropriations
16 GVEA’s Eva Creek $93M Wind Project represents a major portion of the Railbelt total project costs, but
received only $3.4M in two ro unds (1 & 4) of REGRP funding.
44 Alaska Energy Authority
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Impact Evaluation
There are a number of factors affecting the ability of individual regions of Alaska to
develop successful, cost-effective projects. Although a suitable renewable resource is a
critical element, access to project funding is also vitally important. The figures below
highlight the wide disparity of individual regions in providing non-state “match funding”,
though this funding may be from a variety of sources, including in-kind, federal grants,
local or utility debt and equity financing and other organizational grants. Identifying
sources for non-state leveraged funds is a key area of support, that AEA and other
organizations have and continue to provide.
In the figure the total state funds invested in the REGRP projects in regions across the
state is represented by the dot, while the stacked bar chart is the cumulative project costs.
The higher the dot is on the stacked bars, the greater the share of the state’s investment in
the RE projects in the region.
Figure 4.6 Breakdown of State and Leveraged Funds for the 2011 Construction Portfolio
45 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Figure 4.7 Breakdown of Energy Savings for the 2011 Construction Portfolio
Power Cost Equalization Impacts
The Power Cost Equalization (PCE) program, originally established in 1984 to address
significant increases in the cost of electric rates in rural Alaska, aims to normalize the
high costs of electricity in rural communities with the lower costs in more urban areas
through direct-rate reductions. The PCE program provides important support to
communities and households that struggle with meeting the challenge of high energy
costs in most of Alaska’s remote communities.
Currently, the PCE program allows eligible utilities to provide a monthly PCE credit to
residential customers up to the first 500 kWhs and to community facilities up to a
maximum of 70 kWh per month per community member. Businesses, schools and state
and federal customers are not eligible for the program.
The Regulatory Commission of Alaska determines the PCE level for each utility based on
the fuel and applicable non-fuel costs of generating electricity in an individual
community. The specific PCE rate for a community is computed on a kWh basis and
reflects:
95% of a utility’s costs between 14.12¢/kWh and $1.00/kWh
Maximum PCE level is 81.59¢/kWh
In 2011 the PCE program reported supporting 183 Alaskan communities with over 434
GWh of total kWh sold, including 93 GWh of eligible residential electricity and 33 GWh
of eligible community electricity or approximately 29% of total electricity sold in these
communities is eligible for a PCE credit. Legislative funds appropriated for the PCE
program in 2011 were $36 million.
46 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Impacts of the REGRP
The renewable energy projects supported by the REGRP can have several types of
impacts on the PCE program and PCE participants. For example:
An REGRP project developed and owned by a community utility may directly
off-set the fossil fuel costs borne by that utility. Increased operations and
maintenance costs will off-set some of the avoided fossil fuel costs – but usually
the net result will be to lower the utility’s costs. These lower overall costs will
provide some direct benefits to the utilities' customers, and will also provide
benefits to the state – by lowering the PCE payments to the community.
An REGRP project developed and owned by an independent power producer –
could provide a local utility with a lower power purchase cost than existing fossil
fuel options (that are provided by the community or by an IPP). Presumably, the
renewable power purchase agreement will lower the utilities total costs (in
comparison to an existing or new fossil alternative) – and therefore will again
result in a decrease to utilities total costs. As in the previous case, these lower
costs will benefit local ratepayers, and also provide benefits to the state – by
lowering PCE payments.
In both cases, the greatest share of the PCE related benefits will go to local
ratepayers who are not eligible for the PCE program – and therefore are directly
off-setting their current non-PCE supported electric rates.
Our approach to estimate the PCE impacts of the REGRP is to allocate the benefits
associated with the total projected (or actual for operating) MWh production to:
1. The PCE Program (Reduced State PCE payments)
2. PCE in-eligible local ratepayers (Reduction in the non-PCE supported rate for
electricity they must pay), and
3. PCE eligible local ratepayers (May see relatively small change to their PCE
supported rate – and therefore a smaller share of the PCE impact benefit than the
other two groups).
Estimated PCE impacts are presented in Table 6.6 and the following figures. The first
row in table 6.6 contains the estimated impacts for 10 communities with operation
REGRP projects in 2011. The second row represents projected impacts for 26
communities that have projects that are operational or that have received REGRP
construction grants.
47 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
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Table 4.8 PCE Impacts
Total
Annual
Project
Savings
Total
Annual
Project
Savings
Annual
PCE
Eligible
Annual
PCE
Program
Savings
Annual
PCE In-
Eligible
Annual
PCE In-
Eligible
Savings
Annual
PCE
Eligible
Savings
MWh(s) $ Millions MWh(s) $ Millions MWh(s) $ Millions $ Millions
2011
Operational
REGRP
Projects
(Actual)
22,647 $11.2 6,233 $2.8 15,993 $8.2 $0.1
2011
Operational and
Projects in
Construction
(Projected)
52,905 $18 16,812 $5.1 35,739 $12.6 $0.3
As illustrated in the Figure 6.8 pie chart, for the operational projects roughly one quarter -
$2.8 million annually out of $11.2 million - of the estimated PCE benefits go the state as
Program Savings, and three-quarters of the benefits (approximately $8.2 million
annually) going to the non-PCE eligible ratepayers in the participating communities.
Only 1% of the PCE benefit is realized by the PCE eligible ratepayers in these same
communities.
Figure 4.8 Distribution of PCE Impact Benefits for 2011 Operating Portfolio
Similarly, Figure 6.9 illustrates the estimated distribution for PCE benefits for the
Construction and Operational Portfolio. The largest share of the benefits are realized by
the non-PCE eligible ratepayers (70%), followed by the State through lower PCE
program payments (28%), and then by PCE eligible ratepayers (2%).
48 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Figure 4.9 Distribution of PCE Impact Benefits for 2011 Operating and Construction
Portfolio
Due to limitations on the available data our PCE impact analysis excluded 5 projects that
were identified as operated by independent power producers (IPP) due to a lack of
information on power purchase agreement terms. As noted above, a the cost of
renewable electricity offered by the IPP to the local utility will likely be at lower rates
than the diesel generated electricity, this should in effect also reduce the PCE program
costs incurred for that community to a lesser degree.
Also note, that while renewable project operation and maintenance costs may be included
in PCE cost calculations they are not included in this analysis due to inconsistency of
reporting.
Job Impacts
In order to develop a high level assessment of job impacts for the 62 projects in the
REGRP Construction Portfolio, industry averages for individual renewable energy
resource sectors were applied against the 19 projects currently in operation and the 43 in
the construction phase (post-grant).
The industry averages for job impacts were the result of a compilation by the University
of California – Berkeley of existing studies on renewable energy projects.17 The study
17 Max Wei, Shana Patadia, Daniel Kammen, “Putting renewables and energy efficiency to work: How
many jobs can the clean energy industry generate in the US?”, Energy Policy, November 14, 2009.
49 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
proposes a generation based (GWh) factor for each renewable energy sector including
boththe shorter term employment in construction, installation and manufacturing (CIM)
and the longer term employment in operation and maintenance (O&M). The resultant
average allows for calculating both the total person-years of employment, as well as jobs
if the result is divided by the operating life of the project.18 (See Appendix A for
additional background on the Univ. California – Berkley study)
The equations listed below were developed to equate an average employment per unit
energy produced over a project’s lifetime.
Employing this model for the RE Fund program suggested a creation of 37 jobs based on
the amount of energy being displaced (or projected displacement) by the projects. During
the early stages of renewable development in the state, skilled labor was often needed
from outside the state to assist in the feasibility, design, construction and maintenance of
the renewable energy projects. For this reason, it should be noted that not all of these
jobs should be equated with Alaska employment, but that with continued growth in the
Alaska renewable industry, this balance will continue to shift.
Table 4.9 Job and Environmental Benefits of REGRP 2011 Construction Portfolio
RE Resource Sector
Sector Job
Impact Factor Jobs
Person-years
per GWh 19
Person-
Years # of Jobs
Biomass 0.21 180 9
Geothermal 0.25 18 0.9
Heat Recovery 0.25 71 3.6
Hydro / Hydrokinetic 0.27 445 9
Solar 0.23 0.3 0.0
Wind 0.17 294 15
REGRP in Construction Portfolio 1009 37
18 Most renewable sectors have a 20 year project life, but hydro has a longer 50 year life.
19 Due to a significantly higher estimate for landfill gas projects, the lower estimate of 0.32 referenced from
the EPRI 2001 evaluation was utilized. As heat recovery was not included in the stud y, the job impact
factor for geothermal was assumed due to the lower O&M.
Job Impacts Electric = 𝐸𝑙𝑒𝑎𝑟𝑟𝑖𝑎 𝑅𝑎𝑟𝑖𝑛𝑒𝑟 ∗ 𝑅𝐸 𝑅𝑒𝑟𝑛𝑟𝑟𝑎𝑒 𝐽𝑛𝑎 𝐸𝑎𝑎𝑟𝑛𝑟 𝑖𝑛 𝐿𝑐𝑟𝑟𝑛𝑛−𝑦𝑐𝑎𝑟𝑟
𝐹𝑉ℎ ∗ 𝑃𝑟𝑛𝑖𝑒𝑎𝑟 𝐿𝑖𝑒𝑒
Job Impacts Heating = 𝐻𝑒𝑎𝑟 𝑅𝑎𝑟𝑖𝑛𝑒𝑟∗ 𝑅𝐸 𝑅𝑒𝑟𝑛𝑟𝑟𝑎𝑒 𝐽𝑛𝑎 𝐸𝑎𝑎𝑟𝑛𝑟 𝑖𝑛 𝐿𝑐𝑟𝑟𝑛𝑛−𝑦𝑐𝑎𝑟𝑟
𝐹𝑉ℎ ∗ 𝑃𝑟𝑛𝑖𝑒𝑎𝑟 𝐿𝑖𝑒𝑒
50 Alaska Energy Authority
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Due to the unique challenges of installing renewables in Alaska and associated costs, it is
very likely that these employment factors from other areas of the United States
underestimate the benefits to the state.
Environmental Impacts
Although not included in either the TRC or PCT, reducing diesel and natural gas
emissions from offsetting fuel usage offers both benefits to the air quality in Alaskan
communities, as well as a monetized benefit to the state. For this evaluation, we solely
calculated the monetized avoided carbon emissions, though the additional particulate of
generated emissions are monitored by the Alaska Department of Environmental
Conservation – Division of Air Quality.
The monetized avoided emissions for the 62 projects in the REGRP Construction
Portfolio are 115 thousand metric tonnes of carbon dioxide with a monetized value of
over $16 million during the lifetime of the projects.
Table 4.10 Avoided Carbon Emissions
RE Resource Sector
Avoided Fuel Avoided Carbon Emissions
Diesel
(x1000
Gal)
Natural Gas
(MMBTU) Tonnes/Year Project Lifetime
Savings ($ Millions)
Biomass 606 319,162 23,083 $2.4
Geothermal 92 930 $0.1
Heat Recovery 620 6,225 $0.7
Hydro / Hydrokinetic 2,419 24,071 25,117 $6.8
Solar 1.7 33 $0.0
Wind 5,822 60,139 $6.4
REGRP in Construction Portfolio 9,560 343,233 115,527 $16.4
Avoided emissions are calculated as part of the individual project evaluations conducted
by ISER during the REGRP applications and included in this analysis. The avoided
emissions for the two primary generation sources are:
Table 4.11 Avoided Emissions Factors for Diesel and Natural Gas Generation20
Avoided Metric Tonne
CO2
Carbon Price 2011$
(Low) Carbon Price 2011$
Diesel 0.010 per gal
$5.42 per Tonne
0.05 per gal
Natural
Gas 0.053 per Mcf $0.29 per Mcf
20 Carbon pricing and avoided emissions are based on ISER analysis of National Bureau of Economic
Research, “Estimating the Social Cost of Carbon for Use in the U.S. Federal Rulemakin gs: A summary and
Interpretations” and US Energy Information Administration, Voluntary Reporting of Greenhouse Gases
Program, Table1. Carbon Dioxide Emission Factors for Stationary Combustion.
51 Alaska Energy Authority
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5. Renewable Energy Resource Subsector
Analysis
Overview
This section will present a closer review of the REGRP construction portfolio for the
individual primary RE resources of Wind, Hydro, Biomass, Geothermal and Heat
Recovery. In addition, we review the operational portfolio for these resource subsectors
to identify lessons learned that may help guide future management of the Program, and
provide valuable input to industry stakeholders and future participants related to the
relative performance of individual systems and designs.
Included in this section are:
A review of the resource potential for individual renewable energy resources in
the State of Alaska, as well as the development of the related industry sub-sector
since the inception of the REGRP.
A project level Benefit/Cost analysis based on the best available data. This
includes present value of savings in fuel, as well as capital and O&M over the
expected life of the project versus cost. For operational projects, the estimated
performance of projects is compared against the operational performance in 2011.
A high level discussion of secondary benefits associated with the employment,
infrastructure development and environmental benefits associated with specific
renewable energy resources.
It is important to note that our analysis is limited by the quality of the available data,
since VEIC is not familiar with most individual projects operating in the state. In some
cases, especially when projects are only partially funded through the REGRP and rely on
prior infrastructure or earlier phases of development funded outside the REGRP program,
the Benefit/Cost analysis for a given project may not accurately capture the full costs.
This is most evident in the wind energy section, since AEA was a relative late comer in
funding projects in this technology sector. By the time the first AEA project was
completed (in Unalakleet), a number of other projects had been operational around the
state for several years. These projects were originally constructed using other sources of
funding and/or financing, but later submitted applications to the REGRP to expand or
upgrade their systems. For this reason, the full capital costs are not necessarily reflected
in the Benefit/Cost analysis. When possible, we note this probable discrepancy for
individual projects. We expect as the program matures and fewer projects are funded
entirely outside of the REGRP, the costs reported through the program will better reflect
the actual costs for the project in its entirety. In addition, this finding highlights the
continued need for a robust and consistent data collection and management plan across
programs and technology sectors.
52 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Wind
There is significant potential for wind energy in the State of Alaska with more than 134
rural communities identified as having potentially viable wind resource.21 In addition,
there are opportunities for larger commercial and industrial sized systems along the
Railbelt and offshore applications. However, to achieve appropriate economies of scale
for cost-effective offshore applications, siting may be restricted to areas in the southeast
with access to the larger BC Hydro electrical transmission system in Canada. 22 A map
of the wind energy resource at 50 meters above the surface of the earth highlights the
significant potential in the coastal and western parts of the state, as well as elevated areas
of the interior. However, in order to take full advantage of the potential wind energy
available to larger population centers, continued investments in transmission
infrastructure will be required as many of the best resources are not co-located with
population centers and existing transmission lines have limited capacity to carry
additional wind power.
Wind generation capacity has grown significantly since the inception of the REGRP in
2008 with more than 15 MW of installed generation capacity currently operational and an
additional 24.6 MW (Golden Valley Electric Association - Eva Creek Wind Project) and
17.6 MW (Fire Island Wind LLC) expected to come online by 2013.23
The REGRP has provided grant funding to 9 of the 20 wind systems in the state that were
operational in 2011. An additional 12 systems are currently in the construction phase and
21 Alaska Energy Authority & Alaska Center for Energy and Power, Alaska Energy: A First Step Toward
Energy Independence (January 2009)
www.akenergyauthority.org/PDF%20files/AK%20Energy%20Final.pdf
22 Comments attributed to AEA Wind Program Manager Rich Stromberg
23 Data provided by Rich Stromberg, AEA Wind Program Manager, June 2012.
Figure 5.2 50 Meter Wind Map of Alaska
Figure 5.1 Wind Generation in Alaska
53 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
41 in the pre-construction phase including reconnaissance, feasibility, and design. Of the
11 systems operating in Alaska in 2011 that were not originally funded through the
REGRP, several have been awarded funds to expand or update their systems.
The 62 wind projects funded through the REGRP have had a total of $73.7M in funding
appropriated through Round 4 of the REGRP.24 Of the total funding for this sector,
$56M is for the 21 REGRP projects operational or in construction as of 2011, and in sum
will leverage over $125M of external federal, state, local match including utility debt and
equity sources.
Based on the reported performance of the operational systems in 2011 25, the projected
cost-effectiveness of the operational REGRP wind systems ranged from 4.66 (Nome
Banner Peak26) to 0.36 (Emmonak)27 with an average of 2.39.
However, as previously noted, several REGRP awards capture only a subset of total
infrastructure costs, and costs not funded through the REGRP program or reported as
match often difficult to reconstruct. The Nome Banner Peak project is an example, as the
only cost for the project funded through the REGRP was a transmission line upgrade.
This means that none or few of the capital or O&M costs for the project are captured in
the Cost/Benefit analysis. It is tempting for this reason to exclude the Nome Banner Peak
project from the analysis, however since anecdotal evidence suggests similar
circumstances exist to varying degrees in relation to other projects, we have chosen to
report values based on the best available data provided to AEA for each project. We
leave it to the discretion of the program manager and the reader to use caution in
interpreting the output, particularly for very high or low values.
The graph represents the cost-effectiveness of the REGRP funded wind projects that were
either operational or in construction in 2011. Projects operational in 2011 have two
spheres – one in red representing actual performance and the other in blue for the
originally estimated performance. Projects in construction phase have a single sphere
representing their estimated performance.
The scale of the individual bubbles that represent projects are relative to the total wind
sector annual energy generation with the largest project, GVEA’s Eva Creek, projected to
generate 35% more energy than the combined total of all of the other projects. However,
due to the relatively low avoided cost of energy for GVEA ($0.17/kWh in 2013)28, the
24 Fifty-two of the wind systems funded through Round 4 are for separate community applications,
representing nearly 40% of communities in the State of Alaska with viable wind.
25 Reported performance was based on the Alaska Renewable Energy Fund 2011 Status Report
26 The Nome Banner Peak project is for a transmission intertie for a wind project and the relatively high
BCR of 4.66 does not reflect the cost of the installation and op eration of the wind turbines.
27 Based on feedback from AEA Program Manager Rich Stromberg, the Emmonak project is anticipated to
increase in performance with additional operational experience.
28 ISER avoided fuel costs included in individual project analysis for Eva Creek.
54 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
overall project cost-effectiveness is lower than many of the rural wind projects that are
offsetting extremely high diesel-based generation costs averaging $0.44/kWh.29
Figure 5.3 Benefit to Cost of REGRP Wind Projects in Construction Portfolio30
* Note a logarithmic scale was used for the Project Cost due to the wide spread in scale
of the projects.
29 Based on 2010 Alaska Power Statistics Table and an average diesel generation efficiency of 13 kWh/gal.
30 The bubble chart represents the cost-effectiveness of the REGRP funded wind systems that were either
operational (actual - red) or in construction (estimated - blue) in 2011.
55
Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Table 5.1 Costs and Benefits of REGRP Wind Projects in the Construction Portfolio
Project Name Total Project Cost_est Electricity Act/Proj% Diesel Act/Proj% Annual Electricity (kWh) Annual Diesel Displaced (gal) Annual Natural Gas (Mmbtu) NPV Costs NPV Benefits NPV BCR_TRC Bethel Wind Power Project Times Four $ 3,197,986
817,000 62,846
($3,626,531) $8,560,035 2.36
Delta Area Wind Turbines-Construction $ 2,801,500 81% 62% 1,424,640 109,588 ($3,676,956) $9,144,260 2.49
Emmonak/Alakanuk Wind Design and Construction $ 10,733,179 49% 45% 338,526 26,040 ($10,649,890) $1,983,686 0.19
GVEA Eva Creek Wind Turbine Purchase $ 93,300,000
55,510,204 3,469,388
($127,091,567) $170,298,889 1.34
Kotzebue High Penetration Wind-Battery-Diesel Hybrid $ 10,808,919
4,266,667 328,205
($13,300,282) $34,405,418 2.59
Kongiganak High Penetration Wind-Diesel Smart Grid $ 3,300,000
1,167,000 89,769
($3,971,419) $10,331,581 2.60
Kwigillingok High Penetration Wind-Diesel Smart Grid $ 3,200,000
742,636 69,305
($3,595,228) $7,248,665 2.02
Mekoryuk Wind Farm Construction $ 4,031,406 50% 37% 238,706 18,362 ($4,075,693) $1,889,693 0.46
Nome Newton Peak Wind Farm $ 4,444,444
4,266,667 328,205
($7,121,180) $31,348,510 4.40
Nikolski Wind Integration Construction $ 450,930
84,054 10,255
($496,106) $1,278,698 2.58
Nome Banner Peak Wind Farm Transmission Construction $ 890,000 93% 68% 955,148 73,473 ($1,505,733) $6,833,906 4.54
Pillar Mountain Wind Project - Construction $ 21,400,000 102% 93% 12,448,474 957,575 ($29,139,412) $87,996,435 3.02
Pilot Point Wind Power & Heat $ 1,571,240
240,000 22,644
($1,683,324) $3,083,221 1.83
Quinhagak Wind Farm Construction $ 4,838,603 63% 58% 409,240 31,480 ($4,983,221) $3,190,343 0.64
Sand Point Wind Construction $ 1,077,706 28% 24% 522,085 55,460 ($1,410,603) $6,516,122 4.62
Shaktoolik Wind Construction $ 2,727,960
360,289 32,715
($2,892,576) $3,208,497 1.11
St. George Wind Farm Construction $ 2,000,000
511,221 39,325
($2,268,184) $3,280,739 1.45
St. Paul Wind Diesel Project $ 2,100,000
1,600,000 123,077
($3,091,154) $13,251,063 4.29
Toksook Wind Farm Construction $ 1,253,056 107% 93% 176,834 13,603 ($1,339,945) $1,322,312 0.99
Tuntutuliak High Penetration Wind-Diesel Smart Grid $ 3,360,000
517,878 63,496
($3,602,744) $4,087,939 1.13
Unalakleet Wind Farm Construction $ 4,222,752 80% 63% 958,350 73,719 ($4,768,451) $7,810,497 1.64
Wind Program Summary $ 181,709,681 73% 60% 87,555,619 5,998,529 ($234,290,199) $417,070,508 1.78
56 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Wind Costs, Performance and Lessons Learned
Of the 20 operational wind turbine sites AEA currently monitors for performance, the
REGRP has supported the development of 9 systems that are functioning today. Once
the additional 12 projects currently in the construction portfolio are brought on-line, a
more comprehensive picture will emerge of the value in wind-diesel hybrid systems in
reducing energy costs. In addition, since numerous technologies and strategies have been
employed in the construction of the systems, additional data will continue to expand the
industry’s knowledge about developing reliable, cost-effective projects in Alaska. This is
especially true because the range of funded projects represents a broad spectrum,
including both smaller, rural wind diesel systems and several larger multi-Megawatt
projects.
Generally, larger utility-scale wind power systems (e.g. Pillar Mountain - 9MW and Eva
Creek - 24MW) offer lower installed costs compared to the smaller distributed wind
turbine systems in rural Alaska. However, no systems in Alaska have been installed for
capital costs approaching those in other, more developed parts of the country. This is not
surprising based on the climate and infrastructure challenges experienced to varying
degrees for all construction projects in the state.
Table 5.2 Installed Cost of Wind Projects by Capacity
Wind Type
NREL ($/kW) REGRP ($/kW)
Operational/Construction Phase in 2011
Average Average Max Min
Utility >1MW $1,631 $3,133 $3,888 $2,378
Distributed
<1MW $2,500 $10,579 $26,833 $1,078
Because wind is variable in speed and availability, a turbine normally operates at less
than its rated maximum output power. The average output of the turbine, as compared to
its maximum rated nameplate power, is expressed as the Capacity Factor. Turbines in
Alaska were found to have capacity factors in 2011 ranging from approximately 10% to
greater than 30% for the year 2011.31 The overall average capacity factor for Alaska wind
turbines, calculated by comparing the total wind energy generated in 2011 with the
installed nameplate wind capacity was 28.5%.
31 Wind performance data provided by AEA Wind Program Manager, Rich Stromberg. Two wind systems
not funded through the REGRP – Selawik and Kokhanok - performed at or below 5% capacity in 2011.
57 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Figure 5.4 AEA reported wind turbine capacity factors32
A recent study of wind diesel systems documented the trend of improvements in wind
capacity factors33, but also noted the significant investments that are required to allow
higher penetration of wind as a percentage of the total electric load.
Demonstrations of high penetration wind-diesel systems are incorporating the use of
active load dumps for heating, as well as other strategies such as the use of battery
storage systems, synchronous condensers, and grid forming inverters to achieve higher
levels of wind penetration. None of these strategies are without challenges, and as a result
AEA has focused on funding low and medium penetration systems in Round 5 of the
REGRP until earlier high penetration systems are operational. The recently established
Emerging Energy Technology Fund has provided an alternative option for state research
towards developing high penetration systems using energy storage and other non-
commercial read y technologies.
32 Note this includes capacity factors for projects not funded under the REGRP – which can help to provide
broader view of projected and actual installed wind capacity factors. The wind sites - Quinhagak,
Mekoryuk, Sand Point, Kongiganak, Kokhanok and Emmonak – are all currently completing
commissioning and data does not yet reflect full year performance.
33 Ginny Fay, Institute of Social and Economic Research (UAA) and Kat Keith, Alaska center for Energy
and Power (UAF). University of Alaska, Alaska Isolated Wind-Diesel Systems: Performance and Economic
Analysis, June 2010
58 Alaska Energy Authority
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Looking forward, operation and maintenance (O&M) for the installed systems was
reported by AVEC as one of the largest unknowns for wind turbine projects, as the
operational projects may begin to require more substantial repairs, especially in light of
Alaska’s harsh environment.34 Continuing to collect information both on performance
and additional incurred costs should be a priority, particularly as systems begin to age.
Barriers
There are significant challenges to integrating wind energy into the State’s electric grid,
especially in regard to rural Alaska:
Variable resource – The variability of both the wind and the electric load during
the year requires appropriate system design to insure the electric energy supply
matches the demand. Absent energy storage or a strong baseline source of
generation (hydro or diesel), higher penetration as a percentage of total load can
present challenges to utilities, who must be sure demand and supply always match
in order to maintain grid stability.
Stranded resource - The places where wind is most abundant are not necessarily
where most electricity usage takes place, requiring investments in the
transmission or storage of wind energy.
Turbine Siting – Significant improvements have been made in the siting of
turbines both at the national level and in Alaska. Developers are learning to avoid
areas with excessive wind speeds or turbulence, and have improved foundation
designs suitable for geotechnical and/or permafrost conditions.
Due to the relatively high capital costs associated with wind energy, funding
support including the Federal Production Tax Credit (PTC) can be critical for
project development. In other parts of the United States, the continuation of the
PTC program is probably the most critical factor to ensure the continued growth
of wind energy. However, because many of the utilities investing in wind energy
in Alaska are organized as cooperatives, the PTC is less of a driver to
development in this state than elsewhere.35
34 Interview with Meera Kohler and Brent Petrie of AVEC regarding the REGRP impacts on their efforts to
replace 25% of the diesel fuel within the 52 communities they serve.
35 Currently, the Fire Island Wind Project is the only project in the state affected by the PTC.
59 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Hydropower and Hydroelectric Energy
Hydropower is the most mature renewable energy resource in Alaska with over 442MW
of installed capacity reported in 2010 distributed across 34 individual power plants. The
plants range from 550kW (10 Mile) to 126MW (Bradley Lake).36 The majority of the
current large hydro installations are located in the population dense areas of southeast and
southcentral Alaska.
Figure 5.5 Hydropower Generation in Alaska
The additional proposed development of large hydro projects to serve the Railbelt region,
notably the proposed 600 MW Susitna-Watana hydroelectric project in 2025, was cited as
necessary to achieve the goals set forth in the 2010 state energy plan of achieving 50% of
the state’s electrical generation from renewable and alternative energy sources by 2025.37
However, this project would cost many billions of dollars to construct and would not be
funded through the REGRP program as it is currently structured.
Including all potential resources, there is significant potential for both conventional hydro
and hydrokinetic energy. Hydrokinetic energy takes direct advantage of the energy in
moving water in a river or tidal environment without the use of a dam or diversion
channel, but is a much less mature technology than conventional hydropower. In total,
hydropower energy potential in Alaska totals an estimated 45,000 MW. Traditional
hydropower generation has continued to increase under the REGRP, producing over
1,466 GWh of electricity in 2011. Emerging technologies in the hydropower sector for
36 Power Statistics Tables 2010
37 Railbelt Large Hydro Evaluation - Preliminary Decision Document, Alaska Energy Authority,
November 2010.
60 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Alaska are tidal, river and wave energy. While there is significant interest by
communities and developers, there are currently no active grid-connected marine or wave
energy projects installed in the state and no projects funded through the REGRP after
Round 1, when two resource assessment projects were funded. Two pilot projects
installed in Ruby and Eagle were discontinued due to challenges with debris.
The REGRP has provided grant funding to 2 of the 34 operational hydroelectric sites in
the state in 2011, as well as a transmission intertie to expand the service territory of an
existing dam. An additional 9 systems are currently in the construction phase, including
2 project infrastructure upgrades and 2 transmission intertie projects. Finally, 43 projects
are in the pre-construction phase including reconnaissance, feasibility and design.
The state has provided REGRP appropriations through Round 4 of $42.9M for
hydroelectric and other river and marine energy projects. Of the total funding for this
sector, $31M has been allocated to the 11 REGRP projects currently operational or in
construction as of 2011. These projects will leverage over $100M of external federal,
state, local match and utility debt and equity sources.
The graph represents the cost-effectiveness of the REGRP funded hydro projects that
were either operational or in construction in 2011. Projects operational in 2011 have two
spheres – one in red representing actual performance and the other in blue for the
originally estimated performance. Projects in construction phase have a single sphere
representing their estimated performance. The scale of the individual projects in the
figure below is relative to the total hydroelectric and hydrokinetic energy sector annual
energy generation.
61 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Figure 5.6 Benefit to Cost of REGRP Hydro Projects in Construction Portfolio38
38 The graph represents the cost-effectiveness of the REGRP funded hydro and hydrokinetic projects that
were either operational (actual - red) or in construction (estimated - blue) in 2011. The scale of the
individual projects in the figure is relative to the total hydro sector annual energy generation. In the case of
Falls Creek and Humpback Creek project costs in original estimates did not capture total project costs.
62
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Table 5.3 Costs and Benefits of REGRP Hydro Projects in Construction Portfolio
Project Name Total Project Cost_est Electricity Act/Proj% Diesel Act/Proj% Annual Electricity (kWh) Annual Diesel Displaced (gal) Annual Natural Gas (Mmbtu) NPV Costs NPV Benefits NPV BCR_TRC Akutan Hydroelectric System Repair and Upgrade $ 1,491,000
420,000 32,308
($2,068,929) $4,920,503 2.38
Chuniisax Creek Hydroelectric Construction $ 7,167,332
567,870 43,682
($7,982,849) $10,148,359 1.27
Falls Creek Hydroelectric Construction $ 10,178,000 109% 102% 1,933,407 148,724 ($11,416,849) $27,609,838 2.42
Humpback Creek Hydroelectric Construction $ 21,300,000 91% 87% 3,764,000 289,538 ($54,032,617) $80,180,891 1.48
North Prince of Wales Island Intertie Project $ 6,155,019 0% 46% 1,356,224 104,325 ($13,687,394) $19,289,315 1.41
Pelican Hydroelectric Upgrade Project $ 5,520,836
1,000,000 76,923
($6,298,714) $11,168,957 1.77
Reynolds Creek Hydroelectric Project $ 27,000,000
7,351,000 565,462
($29,779,235) $74,667,786 2.51
Snettishsham Transmission Line Avalanche Mitigation $ 3,344,260
935,606 71,970
($4,311,064) $10,772,945 2.50
Terror Lake Unit 3 Hydroelectric Project $ 15,907,950
6,456,150 496,627
($21,525,370) $87,239,685 4.05
Whitman Lake Project $ 25,000,000
7,926,000 609,692
($29,758,380) $95,523,739 3.21
Wrangell Hydro Based Electric Boilers Construction $ 2,082,000
85,821
($2,021,359) $14,356,170 7.10
Cook Inlet TidGen Project $ 8,050,538
1,839,600
24,071 ($9,142,488) $1,956,160 0.21
Hydro / Hydrokinetic Program Summary $ 133,196,935 67% 78% 33,549,857 2,525,072 24,071 ($192,025,246) $437,834,347 2.28
63 Alaska Energy Authority
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Based on the reported performance of the operational systems in 2011 39, the projected
cost-effectiveness of the operational REGRP hydroelectric projects of Falls Creek and
Humpback Creek were 2.18 and 1.47 respectively, with an average of 1.83. Although
included in the construction portfolio, it was noted that the Cook Inlet Tidal Generation
project is not currently a construction project and does not reflect the total anticipated
costs of development of the project.
Hydro Costs, Performance and Lessons Learned
The two operational hydro projects with available performance data40 were within 10% of
the estimated performance in 2011. This can in large part be attributed to the maturity of
the technology in Alaska and the relatively consistent nature of the resource. However,
the inability to consistently predict the installed cost based on the lengthy pre-
construction and permitting phase of the projects, as well as the site specific conditions
for individual hydroelectric projects, can lead to significant variances from the estimated
project costs.
Both operational projects (at Falls Creek and Humpback Creek) originally proposed
lower installed costs in their applications to the REGRP, but ultimately revised costs
upward with increases of 21% and 81% respectively documented in the final installed
cost. For Falls Creek, the increase was in part attributed to the project cost not originally
capturing the cost of prior feasibility studies. In the case of Humpback Creek, two
separate applications were submitted in Rounds 1 and 3 and the project received two
appropriations of $4M each for a total of $8M in REGRP funding.
Table 5.4 Total Installed Cost of Hydro Projects
Hydroelectric Project
REGRP Hydro Installed Costs
Operational Projects in 2011 ($ Million)
Original Final % Variance
Falls Creek $8.4M $10.2M 21%
Humpback Creek $11.6M $21M 81%
In an analysis of the installed costs of operational and projects in construction in 2011,
the conventional hydropower projects included dam and run-of-river systems, covering a
full spectrum of upgrades, new construction, transmission interties and the installation of
new electric boilers to reduce diesel heating costs. The table below reflects projects
identified as new construction.
39 Reported performance was based on the Alaska Renewable Energy Fund 2011 Status Report
40 The third operational project is an intertie to the Reynolds Creek hydro project.
64 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
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Table 5.5 Installed Cost of Hydro Projects by Capacity
Hydroelectric Project
NREL ($/kW) REGRP ($/kW)
Operational/Construction Phase in 2011
Average Average Max Min
Hydro – New $2,240 $8,534 $16,800 $4,536
The two operational projects in Alaska, Falls Creek and Humpback Creek, were found to
have capacity factors of 0.28 and 0.31, respectively,41 for the year 2011. The overall
average capacity factor for the hydro projects Alaska, calculated by comparing the
projected total hydro energy generation with the installed nameplate capacity, was 0.22.
Oversizing of hydro projects for future increases in electric load, as in the case of Falls
Creek,42 affects these first year calculations of capacity factors.
Lower capacity factors in Alaska for hydro projects are typically attributed to the lower
flow rates during winter months. In some cases, as the generated energy is utilized to
offset high cost diesel generation, specific efforts are made to increase head levels of the
dam prior to low flow periods on rivers to insure a minimum generation capacity is
retained year round. 43 The relatively predictable nature of this seasonality and storage
capability of the energy capacity in dam applications allows hydro projects to serve as
base loads for other non-dispatchable renewable resources (e.g. wind turbines).
Although hydropower is the most mature developed renewable resource in Alaska and
most project funded through the REGRP are conventional systems, more emerging
applications of hydrokinetic and tidal energy have also been funded. Ongoing efforts at
resource assessment (conducted through both the University of Alaska Fairbanks and the
University of Alaska Anchorage), as well as a tidal energy feasibility study for Cook Inlet
led by ORPC will improve the understanding of the potential of hydrokinetic and marine
energy applications in the state.
Barriers
Broad adoption of hydropower isimpacted by several market and technology barriers
including:
Scale vs. Cost-effectiveness – As with other technologies, the most cost-effective
applications of hydro are often tied to conventional hydro at a larger utility scale
(>1MW). However, efforts in supporting emerging technologies to allow for
more community scale projects may see significant cost reductions with the
development of an early industry adoption.
41 NREL analysis of new hydro construction projects estimates capacity factors between 0.34 and 0.53.
http://www.nrel.gov/analysis/tech_cap_factor.html
42 In its grant application, Gustuvus Electric estimated 2,000 MWh for fi rst year generation, but suggested
the site was capable of 6,300 MWh annually with increased customer electric loads.
43 Comments from Doug Ott, the AEA Hydro Program Manager.
65 Alaska Energy Authority
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Limited sites – Although Alaska has a significant untapped hydropower potential
in the state, assessing the viability of individual sites, as well as balancing the
development of a hydropower project on a river against competing interests
(environmental impacts, fishing, etc.) limits the number of suitable sites.
Equipping existing non-powered dams with turbines and repowering existing
dams with new turbines is often considered a preferred path to reducing the
permitting and development costs per kW for installations.
Stranded resources - Significant investments in transmission are often required to
allow for the utilization of a hydropower resource, whether centered on a river
system, lake tap hydro, or in the ocean.
Permitting remains as one of the biggest barriers to expediting the hydro
development timeline, as multiple organizations at the state and federal level,
notably the Federal Energy Regulatory Commission (FERC), have jurisdiction
over proposed hydro projects.44
Assessing the potential of smaller community-sized or microhydro run-of-river
conventional hydropower installations having 100 kW average power output or
less, as well as addressing technical barriers, could lower the costs and complexity
of hydropower projects going forward.
44 Legislation currently being proposed in the US legislature (H.R. 5892 - Hydropower Regulatory
Efficiency Act) is targeted to streamline the efficiency of the process and expand FERC’s ability to grant
exemptions to their review process.
66 Alaska Energy Authority
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Biomass and Landfill Gas
Biomass represents one of the broadest spectrums of energy generation in Alaska,
ranging from residential space heating applications to community scale combined heat
and power plants and utility scale landfill gas applications. Several community scale
wood boiler projects are currently operational in Alaska with a total capacity of 1.75
MWth45. Chena Power’s waste to energy CHP system (400kWe) and Anchorage’s
landfill gas-to-energy project (3.2MWe) will add 3.6MWe of biomass electric power
generation in 2012, becoming the state’s first commercial and utility scale projects
generating electricity. Not included in this estimate is the existing UniSea 2MW e
generator that utilizes processed fish oil for over 70% of its blended fuel, as well as other
examples of the use of fish oil by fish processors in the state.
Figure 5.7 Alaska Forested Regions
Biomass potential is widely distributed, with Alaska’s forests capable of growing over
3.5 million cords of wood a year, the fishing industry generating over 21 million gallons
of fish oil, and 7 class 1 landfills.46 A recent evaluation by the USDA Forest Service
identified a significant opportunity for biomass development, especially in Interior
Alaska, where approximately half of the communities bordered by forested regions are
located.47 This study also identified the natural fit of biomass boilers with the more than
50 communities that currently have combined heat and power (CHP) systems in place
with the necessary infrastructure for distribution of the generated heat and power.
45 Total installed capacity estimated based on installed wood boilers in the communities o f Dot Lake, Craig,
Gulkana, Tanana and Tok, as well as the Sealaska Plaza.
46 Renewable Energy Alaska Project (REAP) website - http://alaskarenewableenergy.org/alaskas-
resources/types-renewable-energy/biomass/
47 Assessing the Potential for Conversion to Biomass Fuels in Interior Alaska, United States Department of
Agriculture – Forest Service, Nancy Fresco and Stuart Chapin, June 2009.
67 Alaska Energy Authority
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The Alaska Energy Authority, in partnership with the US Forest Service and NREL,
established funding for a Wood Energy Pre-Feasibility Grant initiative to provide
feasibility funding for “community heating projects of individual facility, community and
district heating projects with high efficiency, low-emission, wood-fired systems.”
Twenty-six applications were received and currently being processed for
design/permitting support through USDA grants.48
The REGRP has provided grant funding to 3 of the operational biomass projects in the
state in 2011, including 2 wood boilers and 1 wood processing facility. An additional 12
systems are currently in the construction phase, including both wood boilers and
processing facilities. An additional18 projects are in the pre-construction phase including
reconnaissance, feasibility, and design.
The state has provided REGRP appropriations through Round 4 of $18.3M for biomass
energy projects. Of the total funding for this sector, $15.8M was designated for the 15
REGRP projects currently operational or in construction as of 2011. These projects
leverage over $10.8M of external federal, state, local match and utility debt and equity
sources.
The graph represents the cost-effectiveness of the REGRP funded biomass projects that
were either operational or in construction in 2011. Projects operational in 2011 have two
spheres – one in red representing actual performance and the other in blue for the
originally estimated performance. Projects in construction phase have a single sphere
representing their estimated performance. The individual scale of the projects is relative
to the total biomass energy sector annual energy generation.
48 AEA Biomass Program Update 2011, Presentation by Devany Plentovich.
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Figure 5.8 Benefit to Cost of REGRP Biomass Projects in Construction Portfolio 49
Based on the reported performance of the operational systems in 201150, the projected
cost-effectiveness of the operational REGRP biomass projects in Cordova, Gulkana and
Tok were 0.98, 0.59 and 0.61 respectively with an average of 0.73. The consistent spread
between actual and estimated performance for all three of the operational biomass
projects is more prominent than other sectors. Continuing to track performance of these
systems will be an important area of focus for the biomass sector of the program.
49 The graph represents the cost-effectiveness of the REGRP funded biomass projects that were either
operational (actual - red) or in construction (estimated - blue) in 2011. The scale of the individual projects
in the figure is relative to the total biomass sector annual energy generation.
50 Reported performance was based on the Alaska Renewable Energy Fund 2011 Status Report
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Table 5.6 Costs and Benefits of REGRP Biomass Projects in Construction Portfolio
Project Name Total Project Cost_est Electricity Act/Proj% Diesel Act/Proj% Annual Electricity (kWh) Annual Diesel Displaced (gal) Annual Natural Gas (Mmbtu) NPV Costs NPV Benefits NPV BCR_TRC Anchorage Landfill $ 7,395,200
24,183,132 0 319,162 ($16,799,890) $33,281,086 1.98
Biomass Fuel Dryer Project $ 600,000
47,742
($1,470,769) $3,392,415 2.31
Biomass-fired Organic Rankine Cycle System $ 4,612,900
3,098,413 201,114
($4,478,544) $10,097,555 2.25
Chistochina Central Wood Heating Construction $ 512,000
13,210
($1,051,954) $1,243,319 1.18
City-Tribe Biomass Energy Conservation $ 508,365
11,600
($684,978) $1,201,843 1.75
Cordova Wood Processing Plant-Purchase and setup $ 137,760 13% 11,400 ($819,275) $1,140,501 1.39
Delta Junction Wood Chip Heating $ 2,868,000
52,508
($4,523,082) $4,528,145 1.00
District Wood Heating in Fort Yukon $ 3,606,255
137,282
($8,264,591) $15,217,666 1.84
Gulkana Central Wood Heating Construction $ 500,000 40% 5,900 ($1,199,462) $530,388 0.44
Haines Central Wood Heating Construction $ 225,120
38,362
($1,419,394) $4,080,735 2.87
Kenny Lake School Wood Fired Boiler $ 565,485
20,000
($1,183,546) $1,534,031 1.30
Lake and Peninsula Wood Boilers $ 493,200
3,902
($594,879) $578,053 0.97
Susitna Valley High School Wood Heat $ 755,500
20,800
($1,575,785) $1,617,165 1.03
Thorne Bay Wood Boiler $ 580,179
17,500
($1,255,155) $1,318,104 1.05
Tok Wood Heating Construction $ 3,260,349 48% 24,400 ($3,588,610) $2,228,822 0.62
Biomass Program Summary $26,620,313 34% 27,281,545 605,720 319,162 ($48,909,916) $81,989,829 1.68
70 Alaska Energy Authority
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Biomass Costs, Performance and Lessons Learned
With three projects providing operational data for 2011, and a further 12 biomass projects
approved through the construction phase, the REGRP is starting to develop a useful base
of knowledge on the projected and actual costs, as well as the performance of individual
systems. This will provide valuable lessons for future program management, industry
project development, and ongoing operation and maintenance of existing projects.
All of the operational biomass projects significantly underperformed in comparison to
initial estimates. This variance was accredited to the relative immaturity of the industry
in Alaska with limited standardization of system designs, as well as lack of full system
hookups and need for trained operation and maintenance staff. AEA is working with
industry groups to standardize biomass system designs, particularly around wood boilers,
to improve performance and reduce costs.51
Table 5.7 2011 Performance of Biomass Projects
Biomass Project
REGRP Biomass 2011 Performance Against Goal (PAG)
(Diesel gallons offset for heating)
Estimated Actual % Variance
Cordova 88,700 11,400 13%
Gulkana 14,643 5,900 40%
Tok 50,400 24,400 48%
Table 5.8 Installed Cost of Biomass Projects by Capacity
Biomass Project NREL ($/kW) REGRP ($/kW)
Operational/Construction Phase in 2011
Average Average Max Min
Biomass CHP $3,000/$5,500 $11,532 n/a n/a
Landfill Gas $2,360 $2,311 n/a n/a
Wood Boiler $1,000 $2,503 $3,826 $1,072
Not included in this analysis are any secondary benefits associated with biomass energy
projects. The illustration to the right from a 2009 USDA study52 identifies the myriad
societal benefits associated with the harvesting of biomass fuels and the influx of
payments associated with potential carbon credits from reduced diesel emissions. As
forestry fire management is a critical effort in Alaska, the parallel benefits to removing
hazardous wood fuels and providing a fuel source to community biomass projects are
specifically noteworthy.
51 Interview with AEA Biomass Program Manager, Devany Plentovich.
52 United States Department of Agriculture, Assessing the Potential for Conversion to Biomass Fuels in
Interior Alaska, June 2009.
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Figure 5.9 Biomass Fuel Harvest Benefits
Barriers
Challenges for developing a more robust biomass energy industry in Alaska include:
Maturity of the technology and market infrastructure development – The
necessary support functions such as availability of spare parts and trained operator
and maintenance personnel can increase O&M costs, as well as lead to lengthy
downtimes. Additionally, fuel processing of both woody biomass and biofuels
require investments in pellet manufacturing plants, fuel dryers for cord wood,
wood harvesting equipment, and (potentially) fish oil processing plants.
Transportation – The cost and difficulty of delivering biomass fuels depending on
the source and processing location can be a limiting factor for biomass energy
project development.
Environmental – Recent advances in biomass technology have significantly
improved the emissions of wood boilers to meet and exceed federal standards.
Proper forestry management practices are also critical to insure a sustainable
source of biomass fuel without impacting the surrounding environment.
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Geothermal
Alaska is home to almost every major type of geothermal resource, but in most cases
these resources are not located near major population centers where the energy could be
used. Alaska has three distinct geothermal regions: the interior hot springs belt including
Chena Hot Springs, the Aleutians and Alaska Peninsula with world-class high
temperature geothermal resources associated with active volcanoes, and hot springs in
southeast Alaska that are caused by deep circulation of water along open faults.
Figure 5.10 Geothermal Resource Map for Alaska
Currently, Alaska has one geothermal power plant located at Chena Hot Springs, which
has been operating since 2006 with a rated capacity of 400 kW and notable as the first
combined heat and power (CHP) application in the state.
The state has provided REGRP appropriations through Round 4 of $13.9 million for
geothermal energy projects. Of the total funding for this sector, approximately $0.9
million is for the 3 REGRP projects currently operational or in construction in 2011.
These projects will leverage over $0.5 million of external federal, state, local match and
utility debt and equity sources.
Several exploration projects have been funded through the REGRP in areas with known
geothermal resources, as evidenced by hot springs and/or fumeroles. In fact, with the
exception of Chena Hot Springs, no significant geothermal resource assessment work has
occurred in Alaska since the early 1980’s prior to the development of the REGRP.
In addition to traditional geothermal energy, heat pumps and enhanced geothermal
projects are included in the geothermal energy category under the REGRP.
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Three heat pump projects have been funded through the REGRP, located in the
communities of Juneau, Seward, and Sitka. Although none are strictly using geothermal
energy they are categorized under the broad category of ‘geothermal energy’ by the
Alaska Energy Authority. The project in Juneau is installed at the airport and is a ground
source heat pump system, utilizing heat stored in the near-surface ground through
horizontal loops rather than vertical wells. Both the Seward Sealife Center and Japonski
Island Boathouse use seawater-source heat pump systems. The Seward Sealife Center
also received funding under the Emerging Energy Technology Fund (funded through the
Denali Commission and managed by the Alaska Center for Energy and Power at UAF) to
fund Phase I of the project, which is not reflected in the Benefit-Cost ratio reported for
the project.
The graph represents the cost-effectiveness of the REGRP funded geothermal projects
that were either operational or in construction in 2011. Projects operational in 2011 have
two spheres – one in red representing actual performance and the other in blue for the
originally estimated performance. Projects in construction phase have a single sphere
representing their estimated performance. The scale of the individual projects in the
figure below is relative to the total geothermal energy sector annual energy generation.
The Juneau Airport Ground Source Heat Pump project was the only reported operational
system in 201153, with a projected cost-effectiveness of 1.03. The Alaska Sealife Center
is being completed in two phases, with the capital costs for the first phase only included
in this analysis. It is expected that if all costs associated with the project were included in
this analysis the actual project Benefit-Cost ratio would be similar to the one reported for
the Japonski Island project in Sitka.
53 Reported performance was based on the Alaska Renewable Energy Fund 2011 Status Report. Although
the Juneau Aquatic Center was operational in 2011, no performance data was available for the 2012 annual
report.
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Figure 5.11 Geothermal REGRP Projects Cost-Benefit Analysis54
* Note a logarithmic scale was used for the Project Cost due to the wide spread in scale of the
projects.
54 The scale of the individual projects in the figure is relative to the total biomass sector annual energy
generation.
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Table 5.9 Costs and Benefits of REGRP Geothermal and Solar Projects (combined) in Construction Portfolio
Project Name Total Project Cost_est Electricity Act/Proj% Diesel Act/Proj% Annual Electricity (kWh) Annual Diesel Displaced (gal) Annual Natural Gas (Mmbtu) NPV Costs NPV Benefits NPV BCR_TRC Seward Alaska Sealife Center Ph II Seawater Heat
Pump Project $ 286,580
51,888
($1,197,804) $3,189,232 2.68
Japonski Island Boathouse Heat Pump in Sitka $ 165,000
2,700
($212,427) $224,369 1.08
Juneau Airport Ground Source Heat Pump Constr $ 1,026,000 34% 37,082 ($3,140,700) $3,226,815 1.03
Geothermal Program Summary $ 1,477,580 34% 91,670 ($4,550,931) $6,640,416 1.46
Kaltag Solar Construction $ 100,000
10,096 777
($98,503) $68,315 0.69
McKinley Village Solar Thermal Construction $ 193,600 38% 32,000 2,462 ($187,961) $214,560 1.14
Solar Program Summary $ 293,600 38% 42,096 3,238 ($286,464) $282,875 0.99
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Geothermal Costs, Performance and Lessons Learned
Absent the addition of additional operational projects in the geothermal sector, limited
cost and performance information is available.
Feasibility and reconnaissance projects funded through the REGRP for geothermal
projects include Mount Spurr, Akutan, Pilgrim Hot Springs, Manley Hot Springs, and
Tenakee Inlet. The fact that none of these projects have progressed beyond the
exploration phase highlights the challenges associated with geothermal development
anywhere, but especially in remote regions of the state. Resource assessment is often a
multi-year undertaking, and results are slow to become available. When compared to all
other renewable resources, geothermal energy has the highest risk and costs associated
with the exploration phase. However, where economic to develop, geothermal energy is
highly desirable because it can supply base load heat and power whereas most renewable
resources are intermittent.
Barriers
Heat pumps require low cost electricity to be cost-effective, which limits their
usefulness in rural Alaska. In addition, the cold average ground temperatures in
most regions of the state reduce the efficiency of traditional ground source heat
pumps compared to other, more temperate regions. Nonetheless, in regions and
where low cost electricity is available and ground temperatures are moderate, heat
pumps can be used to decrease local heating costs. The challenge for the REGRP
is that the areas where heat pumps are generally most economical to install are in
areas that have relatively low overall electricity costs, but high heating fuel costs.
This situation describes certain areas of the state, such as Kodiak and parts of
Southeast Alaska, but much of the state with high heating fuel costs also derive
their electrical energy from diesel power systems, thereby making the electrical
costs too high for heat pumps to be cost-effective.
Costs associated with geothermal exploration are very high compared to
exploration costs for other renewable resources. This makes geothermal energy a
risky proposition for private investment at the exploration phase. For this reason,
funding the evaluation of these resources through the REGRP increases the
chances that any economically developable projects will move forward.
77 Alaska Energy Authority
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Heat Recovery
Space heating is a significant energy load for many Alaskan communities, residences,
and businesses. For this reason, offsetting a portion of the heat energy ‘wasted’ as a
byproduct of diesel electric power generation can result in significant savings. Heat
recovery has long been a priority of AEA’s Rural Power Systems Upgrade program and
as a result many powerhouses in Alaska have some type of installed heat recovery
system, although not all are fully functional. The most efficient use of waste heat is to use
it directly as heat. This avoids efficiency losses that occur when heat is transformed to
another kind of energy, such as electricity. Typical uses for the recovered heat in rural
communities include space heating, domestic hot water, and tempering municipal water
supplies to prevent freezing and facilitate treatment.
Figure 5.12 Alaska Fuel Distribution Map
The limited and high-cost modes of transport for delivering fuel to rural Alaskan
communities places a premium on the efficient use of diesel fuel for electrical generation,
as well as space heating and highlights the needs for well organized community planning.
With over a quarter of rural village diesel generators already equipped with jacket water
heat recovery systems, the value of the efficiency gains and reduction in fuel costs is
widely recognized.
The efficiency of recovering waste heat for augmenting electrical power production is
lower than that for heating; however, it can be attractive and economical in some places
since electrical power is needed year round as opposed to space heating, which is
required at varying levels throughout the year.
The REGRP has appropriated over of $7.8 million through Round 4 for 12 heat recovery
projects. Of the total funding for this sector, approximately $6.9 million is for the 9
REGRP projects in the 2011 construction portfolio, 3 of which were operational as of that
time. These projects leverage over $7.8 million of external federal, state, local match and
utility debt and equity sources.
78 Alaska Energy Authority
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The graph represents the cost-effectiveness of the REGRP funded heat recovery projects
that were either operational or in construction in 2011. Projects operational in 2011 have
two spheres – one in red representing actual performance and the other in blue for the
originally estimated performance. Projects in construction phase have a single sphere
representing their estimated performance. The scale of the individual projects in the
figure below is relative to the total heat recovery energy sector annual energy generation.
Figure 5.13 Heat Recovery REGRP Projects Cost-Benefit Analysis55
In the program documentation, the Cordova Heat Recovery project was noted to not have
any electrical savings estimated for the project despite being a CHP application with an
organic Rankine cycle similar to Kotzebue. This would affect both the magnitude of the
savings, as well as the cost-effectiveness of the overall project for Cordova.
55 The scale of the individual projects in the figure is relative to the total biomass sector annual energy
generation.
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Table 5.10 Costs and Benefits of REGRP Heat Recovery Projects in the Construction Portfolio
Project Name
Total
Project
Cost_est
Electricity
Act/Proj%
Diesel
Act/Proj%
Annual
Electricity
(kWh)
Annual
Diesel
Displaced
(gal)
Annual
Natural
Gas
(Mmbtu)
NPV Costs NPV
Benefits
NPV
BCR_TRC
Ambler Heat Recovery
Construction $500,000 8,864 ($513,250) $945,824 1.84
Cordova Heat Recovery
Construction $3,770,000 56,773 ($3,660,194) $4,964,185 1.36
Hoonah Heat Recovery
Project $1,005,000 57,000 ($975,728) $4,273,896 4.38
Kotzebue Electric Heat
Recovery Construction $1,215,627 1,213,348 184,537 ($1,520,527) $19,332,088 12.71
McGrath Heat Recovery
Construction $954,225 72% 22,975 ($6,047,269) $7,941,943 1.31
North Pole Heat
Recovery Construction $1,050,000 30% 37% 442,117 27,632 ($1,019,417) $1,303,351 1.28
Point Lay Heat Recovery
Construction $4,257,116 109,588 ($4,295,172) $13,634,081 3.17
Saint Paul Fuel Economy
Upgrade $98,149 18,030 ($152,169) $2,001,880 13.16
Unalaska Heat Recovery
Construction $1,919,807 1,662,400 127,877 ($1,977,591) $10,629,471 5.37
Heat Recovery Program
Summary $14,769,924 30% 54% 3,317,865 613,277 ($20,161,319) $65,026,720 3.23
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As noted earlier, the costs and the resulting cost-effectiveness highlighted in the graph
can range widely based on the application. The REGRP funded heat recovery projects
include both additions to new diesel powerhouses as well as retrofits of existing
generators and expansions to existing heat recovery systems. Based on our analysis,
expansion of existing systems results in the best opportunity for communities and the
REGRP to lower energy costs.
Heat Recovery Costs, Performance and Lessons Learned
It is difficult to compare the economics of the heat recovery systems installed under the
REGRP program because each project is unique to an individual community and very
local conditions and circumstances. Most involve the direct use of recovered heat,
although the size of the project varies considerably. Two projects, including the Cordova
and Kotzebue heat recovery construction projects involve the installation of heat to
electric power systems. Cordova is in the final stages of commissioning a Pratt and
Whitney organic Rankine cycle 280 kW system, while Kotzebue has proposed the
installation of a smaller ammonia-cycle system designed by Energy Concepts.
Because few of these systems have operated long enough to provide quantitative data, the
true impact is difficult to assess through projects funded under the REGRP alone.
However, through both pre-construction cost-benefit ratio estimates as well as data from
operational systems funded outside the REGRP, the potential positive impact per dollar
spent is quite high. This is because heat recovery is in essence an efficiency
improvement, taking maximum advantage of fuel already shipped into a community for
the purpose of generating electric power.
Both through in field performance monitoring by AVEC, as well as a research project
conducted by the University of Alaska Fairbanks, significant efficiency gains were
reported as the graphic below highlighting the performance of older diesel gensets against
newer equipment with installed heat recovery.56
56 Alaska Energy Wiki, Alaska Center for Energy and Power
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Figure 5.14 Efficiency Gains from New Diesel Gensets with Heat Recovery
Old Technology New Technology
80% Wasted, 20% Utilized 37% Wasted, 63% Utilized
Barriers
Standardization of system design for both diesel generators and heat recovery
systems has been a priority for the PowerHouse Upgrade Program at AEA. This is
an important factor for both reducing cost and fostering consistency in the
performance of systems.
Operation and maintenance of the heat recovery system is also a critical factor as
the particulate emissions from the generator exhaust can have significantly reduce
the heat recovery system performance if not well maintained. It has been reported
that some systems installed in communities are not operational.
82 Alaska Energy Authority
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6. Market Development
Overview
In this section we review the Alaska renewable energy market development from the
REGRP inception in 2008 to the end of 2011, drawing upon input from state energy data,
resource working group reports, a subset of individual interviews with industry
stakeholders and other existing reports on renewable energy in Alaska.
Although the direct costs and savings of the program are critical for understanding the
impact of a renewable energy program, longer term goals for developing a sustainable
industry for renewable energy projects is equally important. In this section we will
review:
A high level overview of the REGRP performance within the overall context of
energy in Alaska
Job statistics for RE in Alaska from 2008-2012, including training for
renewable energy jobs.
Impacts of the renewable energy projects on PCE communities and the
funding for the state program.
Development of conferences, organizations, reports and resources developed
around the REGRP
Alaska boasts an abundance of fossil and renewable resources that rival many countries,
but Alaskan consumers pay among the highest rates for heating and electricity in the
country—50% higher than the U.S. average57. According to the Energy Information
Administration, in 2012, Alaska ranked second in 2012 for high residential electricity
costs with an average price of $17.91 cents/kWh as compared to the national average of
11.52 cents/kWh. However many of Alaska’s rural villages mirror 1st ranked Hawaii’s
$37.05 cents/kWh.
The most recent numbers published in 2009 indicate that Alaska receives the majority of
its electrical generation from natural gas (39.5%), petroleum (15%), hydroelectric
(14.6%) and coal (6.1%) with no discernible generation coming from non-hydro
renewables.58 Alaska ranks 48th of all states in non-hydro renewables, largely due to the
absence of a transmission system capable of transporting the remote renewable energy
resources to population centers.59
57 EIA SEDS Database
58 Based on 2010 Alaska Power Statistics Tables wind power has increased its share of the generation to
0.3% and projected by AEA to represent 2% of Alaska’s electrical generation by 2012.
59 EIA SEDS Database
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Forces at work for Alaska’s energy challenges:
Harsh climate, including long, dark and cold winters and corresponding high
energy needs.
High cost of fuel for generation, due to export of the majority of crude and import
of almost all refined fuels aside from some transportation fuel refined at two local
refineries. In addition, due to limited interconnections of transmission and
distribution systems between rural communities in Alaska, the majority of the fuel
is transported significant distances.
Lack of economies of scale due to fewer ratepayers. Nevertheless, electricity
consumption is growing much faster in Alaska than in the rest of the US with an
estimated consumption of 55 barrels of oil per year per person (25 barrels per year
in rural AK) .60 Alaska ranks 2nd nationally in energy consumption per capita61,
though this may be attributed largely to increased commercial and industrial
activity and jet fuel usage associated with travel within the state.62
Most electricity consumers outside of the major cities are not linked to utility
scale electric power grid via transmission and distribution lines. Rural
communities rely primarily on mini-grids supplied by diesel-electric generators.
In rural Alaska nearly 80% of communities are dependent on imported diesel for their
primary energy needs63 to run generators and
heat their homes with fuel oil, leaving them
vulnerable to fluctuating prices and victim to
significant delivery surcharges. Since 2006,
the percentage of individual household income
the average rural Alaskan spends on energy
shifted from 20% to 50% due to increasing
costs.64
One additional struggle facing Alaska despite
impressive renewable resources is that many of
these resources are stranded away from
customers, rendering them uneconomic to
develop due to high transmission costs and/or a
low customer base. In 2008, the Denali
Commission funded a study of potential transmission line extensions and interties to
build out the electrical infrastructure enjoyed by the rest of the developed world. With
recent innovations in technology and connecting with these stranded resources through
60 Energy for a Sustainable Alaska: The Rural Conundrum. Commonwealth North, February 2012.
61 EIA Database.
62 Reporting from Railbelt utilities suggests a downward trend of 5-9% of residential electricity usage
during the period from 2000 to 2011. Source: AEA September 2012.
63 Energy for a Sustainable Alaska: The Rural Conundrum. Commonwealth North, February 2012.
64 Energy for a Sustainable Alaska: The Rural Conundrum. Commonwealth North, February 2012.
Figure 6.1 2008 Denali Commission
Transmission Study
84 Alaska Energy Authority
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transmission or potentially co-locating processing industries in the vicinity of resources
has been investigated as an opportunity for Alaska. Striking this balance of investing in
transmission infrastructure will be important to further support development of RE
resources in both rural and Railbelt areas of the state.
In addition to economic challenges, integrating renewables on small village microgrids
presents integration and power quality issues that limit the level of penetration the
renewable system can achieve, resulting in lower displaced fuel. Even Alaska’s road
system-based ‘Railbelt grid’, is considered a micro-grid in relation to the large integrated
grid systems in the lower 48 and Europe. This infrastructure presents interesting and
unique challenges for implementing energy solutions to maximize the penetration of
renewables.
One silver lining of high energy prices is that products and technologies not considered
economically viable options elsewhere in the country, pencil out in Alaska, making it an
excellent place to demonstrate new technologies and a potential launching place for
global solutions to other remote or rural villages and industrial locations.
Framing the Renewable Energy Fund
The Renewable Energy Fund was identified by Chris Rose, Executive Director of the
Renewable Energy Alaska Project (REAP), as one of his fledgling organization’s top
priorities in 2006. Renewable energy in the form of conventional hydropower plants had
been a mainstay of southeast Alaska and as a percentage of the Railbelt generation with
the state-owned Bradley Lake hydro project for decades, however, other renewable
energy solutions - most visibly wind - were just being reintroduced with mixed success
after a series of failures in the 1980’s. According to EIS database, in 2006, the energy
mix for Alaska was 18% renewable (99% hydro) with the remainder as fossil fuels.
Fossil fuel generation had seen a slight decline, primarily due to a reduction in natural gas
usage with oil and coal remaining fairly stable.
At that point in Alaskan energy history, prices were climbing and in 2006/2007, the
worldwide oil price spike hit Alaska at an exponential level. Although the higher per
barrel price resulted in increased oil revenues for the state operating fund, energy prices,
specifically in rural Alaska, hit unsustainable levels, compounding the already high prices
with additional costs associated with transporting the fuel across the rural landscape by
barge and air freight. The impact was felt in urban communities as well, especially
Fairbanks which utilizes heating oil as its primary heating source, instead of the locally
extracted/natural gas infrastructure surrounding Anchorage.
This crises combined with the budget surplus from higher oil prices provided the political
capital necessary to enact change. In 2008, Governor Sarah Palin announced a state goal
of 50% electrical generation from renewable energy sources by 2025. This target
mapped closely with the passage HB 152 in 2008 which created the Renewable Energy
Grant Fund and positioned Alaska as a national leader in funding for renewable energy.
85 Alaska Energy Authority
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The RE Fund was created with the goal of funding projects to install commercialized
technology that could make an immediate difference for Alaskans.
While the RE Fund was approved by the legislature over 4 years ago, the state is just
starting to see the first years of actual production data due to the application, contracting
processes, permitting and construction. The exact impact of the RE Fund on the Alaska
Renewables market is difficult to empirically discern due to a lack of granularity in the
data reported at the state level on organizations specifically focused on renewable energy.
A look at the evolution of renewables development in Alaska can identify correlative
examples of growth since the inception of the program, but not necessarily causation.
State Leadership and Policy Action
Affirming the Goal:
Former Governor Sarah Palin’s initial energy production goal was reaffirmed by
Governor Sean Parnell in the July 2010, Alaska Energy Pathway Toward Energy
Independence. The document also added an increase in energy efficiency by 20%
by 2020.65
This pledge was adopted by the legislature in 2010 through House Bill 306 which
established a 50% by 2025 renewable electricity goal for the state through
legislative intent. One of the most aggressive in the country, it is not currently
backed up with any codified policies or interim performance metrics to gauge
progress and also sets a goal to reduce per capita electricity use in the state by
15% by 2020.
Setting a State Energy Policy:
SB220 was designed as an ‘omnibus energy bill’, and declared the need for a
statewide energy policy. It included a number of components including providing
the Alaska Housing Finance Corporation bonding power to create a $250 million
revolving loan fund to help finance energy-efficiency retrofits in public buildings
across the state.
Program Creation:
Emerging Energy Technology Fund – Once the RE Fund was passed and the
$100M authorized under Round 1, it rendered $5M set aside by the Denali
Commission to support of renewable energy projects in 2006 unnecessary. The
Denali Commission chose to invest the funding in a pilot program cal led the
65 Alaska Energy Pathway Towards Energy Independence. Alaska Energy Authority, July 2010.
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Impact Evaluation
Emerging Energy Technology Fund to provide a funding mechanism for
demonstration projects not eligible for the RE Fund. Based on the success of that
program, in 2011, the State of Alaska created the Emerging Energy Technology
program under SB220, and provided funding in the amount of $4.8M which was
matched by the Denali Commission with $4.1M for a total of $8.9M.
o Weatherization - Since 2008, the State of Alaska has authorized $511M in
expenditures to support weatherization efforts. This program was developed in
tandem with the RE Fund, as it was recognized that energy efficiency
improvements were critical to an effective overall management strategy to
stabilize energy costs, particularly for rural Alaska where weatherization is the
clearest path to reducing energy costs for an individual home owner.
o RE Fund - HB250, signed by Governor Parnell on May 2nd, 2012, reauthorized
the Renewable Energy Grant Fund Program through 2023 with the intent of
continued funding at a level of $50M per year.
Other Financing Mechanisms:
o SB 25 - Alaska’s Sustainable Energy Transmission and Supply Development
Fund (SETS): It has been recognized that the RE Fund is a grant only program
and is not an adequate funding vehicle to fund very large projects appropriate to
applications such as the Railbelt. Therefore, SB25, passed in 2012, authorizes the
fund to be capitalized in the amount of $125M in FY13 with the goal of enabling
a revolving loan program through the Alaska Industrial Development and Export
Authority for energy projects (renewable and non-renewable).
Resource Specific Policy:
Geothermal Regulatory Changes - One of the consequences of increased
interest in geothermal energy spurred in part by the RE Fund is a change in
regulatory statutes for geothermal energy. Prior to 2009, geothermal resources
under 150°C were regulated by DNR as water resources. This was primarily
because resources below this temperature were not considered to be developable
for power generation purposes. With the development of the Chena Hot Springs
400 kW geothermal plant using geothermal fluid under 75°C and the subsequent
submission of several RE Fund applications for additional low temerature
resource exploration and development projects, it was apparent that the threshold
of 150°C was not necessarily a barrier to power generation given modern
equipment. For this reason, jurisdiction over geothermal exploration and
development was moved to the Alaska Oil and Gas Conservation Commission for
all geothermal exploration and development projects over 150°C, or for projects
below 150°C intended for commercial power or heat sales.
Regional Planning
In July of 2010, the Alaska Energy Authority created the Alaska Energy Pathway Toward
Energy Independence which provided Alaskans with a road map that each community
could use to make energy decisions to help the state reach the 50% by 2025 goal.
87 Alaska Energy Authority
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Utilizing a regional approach, it provided detailed data for each community including
generation capacity, costs of energy, potential resources, etc and utilized them in case
scenarios that could be used as guidelines for action.
The Pathway estimated that Alaska would spend approximately $5B in diesel fuel over
the next 20 years in rural Alaska and $60B along the Railbelt.66 When compared against
their total estimated investment statewide to develop all renewable projects that were
economically viable ($7.3B for Railbelt) it made the case that investment in these
technologies now may make economic sense in the long run.
A key priority of the Energy Pathway to achieve these goals was to continue to fund the
Renewable Energy Fund. However, it also recognized the limitation of the grant fund in
the long term and recommend adding loans to the project financing options available
from the state. 67
Motivated by energy security, economic development, and AEA’s mission to lower the
cost of energy in Alaska, the Pathway also detailed plans to decrease electric non-Railbelt
renewables from the current 63% (primarily hydro) to 91% at an approximate cost of
$2.8B following a regional planning model.
Since 2008, AEA has used this model to create two large scale regional plans starting
with the Integrated Railbelt Resources Plan in 2009 and Southeast Integrated Resources
Plan which was completed in 2011 as a direct outcome of the Pathway’s focus.
In addition, AEA has started to further develop a regional planning model around these
goals. In the past year, they have funded Regional Planning efforts throughout the state
and hired a Regional Planning Coordinator and two technical advisors to assist with this
effort.
Business Indicators of Market Development
Business Licenses
A review of business licenses reveals a marked increase in the number of construction
and engineering organizations in the state over the past 5 years, it is unclear what part of
that growth can be linked to the influx of renewable energy spending by the state. This
lack of detail is compounded by the fact that the fossil energy extraction industry is
significantly larger and likely obscures any clarity in shared job sectors like engineering
and construction.
66 Alaska Energy Pathway July 2010 Alaska Energy Authorit y
67 Alaska Energy Pathway Toward Energy Independence. Alaska Energy Authority, July 2010.
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Cost Stabilization
The RE Fund insulates small Alaska communities from potential future price increases in
diesel fuel. In others words, the Renewable Energy fund, can be viewed as a hedge
against future price increases, rather than a significant reduction in energy costs to the
individual home owner. This is in contrast to the Weatherization and Efficiency
programs, also managed by the state, which can and often do show an immediate savings
for residents who participate in those programs.
There is anecdotal information that in some cases local energy costs can actually increase
certain segments of a community if a renewable energy system is installed. For example,
if a biomass project that uses cordwood sets a going rate for delivered wood at $250/ton
in the interest of providing well-paying employment opportunities during the winter
months when most harvesting is completed, that rate will drive rates for delivered wood
throughout the community. If the previously established rate was much lower, it could
force an increase in heating costs for community members dependent on the purchase of
delivered cord wood.
Local Business Support
There are examples where energy projects funded through state or other funding sources
have had a substantial positive impact on a small, niche market within a community often
centered upon a single business enterprise or cluster or businesses that benefit the
community through an increase in revenue, or reduced costs for operation.
One example is a 20-Ton absorption chiller installed in Kotzebue, Alaska. This unit,
custom designed for Kotzebue Electric Association, was originally funded by AEA in
1995, prior to the development of the REF. However, KEA was awarded REF funds to
repair and upgrade the unit under Round 2. The system uses recovered heat from the
diesel power plant to produce 10 tons of flake ice per day during the fishing season.
By making low-cost ice available to local fisherman, commercially caught salmon can be
placed on ice shortly after they are caught, increasing both the quality of the product and
the corresponding market value. The increase in market value will provide increased
revenue to the local fisherman over the 17 year operating lifetime of the project.
Impact on Jobs
One key indicator of economic impact is job growth. The Alaska Green Jobs Repor t,
published in June 2011 by the Department of Labor estimated that during 2010, there
were 145 green occupations or 4973 green jobs in Alaska, representing 1.7% of the
state’s private and local government employment. Of this number, renewable energy
accounted for 13% of those jobs, and primarily existed among utilities and local
government.
These numbers are influenced by a somewhat subjective scoring multiplier according to
the percentage of time an employee spends doing renewable focused tasks. With very
few jobs receiving scores over 6 or 7 one could assume that many of these jobs were not
89 Alaska Energy Authority
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necessarily created by the RE industry, but instead indicates that much of this work was
added on to existing positions to support a broader energy industry focused on fossil
extraction and generation as well as renewables. The level of data we found did not
support this second level of analysis.
The report did uncover some growth trends based on direct employer questioning.
Around 22% of the green employers surveyed reported they had added additional jobs
due to increased demand for green goods and services and 14% of firms across industries
said they were adding jobs in response to green demand. In addition, 36% indicated
sending workers for additional green jobs training, however as with all of these figures, it
is not reported how renewable-specific jobs. With this baseline data available in the
future, this may be a more worthwhile exercise to conduct every few years, perhaps with
an increased level of granularity for renewables.
RE Fund Job Analysis
While the greater renewable energy industry job determination was somewhat
incomplete, we utilized a basic economic model with common multipliers to gain
information about the projects the RE Fund supports.
For the RE Fund, we used a standard economic model which utilizes job data to average
employment per unit energy produced over a project’s lifetime. While the model is based
on plant operations, it can be tailored to fit any position involving fuel offsets.
Based on performance data or, if not available, proposal projections, the model allows for
the estimation of specific factors (here Mmbtu’s displaced) that then interact with
standard multiplier assumptions to estimate the average number of jobs that will be
produced by the project over its lifetime (see Appendix A).
One time employment factors such as construction and installation can be averaged over
plant lifetime to obtain an average employment number that can be directly added to
ongoing employment factors such as operations and maintenance. Key variables include
capacity factor, type of resource/technology. One job is full time employment for one
person for a duration of 1 year.
Employing this model for the RE Fund program estimated a creation of 197 jobs based
on the amount of energy being displaced (or projected displacement).
Organizational Growth in the Energy Sector
While there was a lack of statewide data reflecting the growth of the renewable energy
related organizations, anecdotal evidence provided by individual companies highlights
the evolution of the industry.
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Renewable Energy Alaska Project (REAP)68
REAP was formed in 2004 by Executive Director Chris Rose with the goal of promoting
the use of renewable energy in Alaska. It has since grown to include more than 70
organizational and contributing members representing a diverse coalition of small and
large Alaska electric utilities, environmental groups, consumer groups, businesses,
Alaska Native organizations, and municipal, state and federal entities. REAP was
Alaska’s first and remains its only education and advocacy group focused solely on
renewable energy.
Director Chris Rose and the Board of Directors of REAP representing a variety of key
energy stakeholders are credited for laying much of the groundwork to draft and pass the
legislation which enabled the creation of the RE Fund
Since 2004 REAP has grown from a $110,000 budget with one staff member to an
$800,000 organization with 5 staff. In 2007, REAP reported 48 members. By 2012,
REAP membership had grown to 83. The largest growth was in their Business and
Consumer Organization categories.
Table 6.1 Renewable Energy Alaska Project Membership Categories
Category 2007 2012
Total Members 48 83
Large Utilities 5 6
Small Utilities 11 10
Businesses 13 36
Conservation 4 7
Consumer Groups 5 14
Native Organizations 4 6
Advisory Members 6 7
Director Chris Rose reports that they have seen an increase in out of state players and
local consulting firms focused on energy projects. While he does not link this growth
directly to the RE Fund, he does believe it reflects the strength of the industry and
believes the RE Fund reinforces that. He points to Alaska’s recognized global leadership
in Wind-diesel technologies as a direct result of the RE Fund investment.
68 Interview Chris Rose 7.13.12, Interview Stephanie Nowers 7.10.12, email Erin Jones 7.10.12
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Alaska Village Electric Cooperative69
AVEC began integrating renewable energy into their 52 rural power systems in 2003 as
part of an ambitious goal of displacing 25% of their diesel fuel Since these projects were
constructed before the Renewable Energy Fund, they were financed through a variety of
other means including the Denali Commission, Rural Utility Services and other state
support, some bond sales, AVEC cash match through long term loan. Through this
process, AVEC installed renewable-diesel hybrid systems (all wind) in 5 of their 52
villages.
Since the inception of the Renewable Energy Fund, AVEC has used this opportunity to
finance an additional 7 wind systems with others in the planning stages. AVEC credits
the RE Fund with supporting the development of their renewable projects more quickly
than in absence of the program. This reflects the barrier communities face in justifying
the capital investment required for financing projects.
AVEC has not added any additional permanent jobs due to the RE Fund, i nstead they
have trained their existing village technicians to handle O&M needs of the turbines,
although they have created additional temporary jobs for the construction of the wind
turbines including temporary project managers and construction technicians.
Impact to the State
They do feel that the RE Fund has benefited the state by creating enough of a market to
produce in-state experts on design, engineering and construction of wind projects. Before
the fund was in place, they had to bring in experts from the lower 48 to assist with those
tasks. Now, they can turn to in state companies like STG, V3, BBFM, Golder, etc. It has
also resulted in more in-house expertise within AVEC employees.
In order to increase the impact to their organization and the 5 2 communities they serve,
AVEC believes more projects need to become operational. They believe the RE Fund
can improve its impact by increasing the dollars available for construction projects which
would provide bigger paybacks for state investment.
WHPacific70
WHPacific is an engineering services company wholly owned and operated by the
NANA Regional Corporation, the regional corporation for northwest arctic Alaska,
including Kotzebue. The majority of their $65-70M in sales are based in the lower 48,
however, they do offer quite a few services to the resource extraction industry in Alaska.
In 2008, WHPacific initiated an energy strategic plan to gain involvement in the state of
Alaska’s energy solutions focused on remote power solutions in the NANA region and
beyond, including distributed generation, O&M, energy audits, and some additional
69 Interview Meera Kohler and Brent Petrie, AVEC. 6.29.12
70 Interview Jay Hermanson and Kat Keith, WH Pacific 7.3.12
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North Slope services. They indicated that this new focus was due to the Renewable
Energy Fund.
Impact to the Organization
The energy group was approximately $300K in revenues in 2009 and it has grown to over
$6.7M for FY12 with an estimated $9M for FY13. WHPacific attributes a significant
amount of that growth to the RE Fund. Due to this growth, WHPacific believes they
have added approximately 15-20 jobs.
In addition to direct revenue to the bottom line, WHPacific indicates their involvement in
RE Fund projects has strengthened their resume with customers outside of Alaska. It has
served as a springboard, further building their business due to their credible experien ce
gain through the RE Fund.
Similar to AVEC, WHPacific credits the RE Fund for building key capacity within the
organization and throughout the state. “Four years ago, we didn’t know a lot, but through
these projects we have built capacity and better understand the resources as well as
understanding how to manage a successful project to completion.’ He also listed the
value of understanding how AEA manages a project as a positive area of growth thanks
to the fund.
Impact to the State
From a statewide perspective, they too pointed at the growth in installed capacity of wind
to make the point that the RE Fund has had significant impact on Alas ka. In 2012, the
state went from 15.3MW to an anticipated 63.8MW71 by the end of this year in rural
Alaska and throughout the Railbelt.
WHPacific believes that Alaska should be doing what we can to foster this potential
market by rewarding and fostering collaboration between potential applicants to make
their funding go much farther. Alaska will be left with expertise project developers in
state and can then step up as a global leader.
Alaska Center for Energy and Power72
ACEP is an applied energy research group at the University of Alaska Fairbanks under
the Institute of Northern Engineering. It was formed in 2008 by INE Director Dan White
and Gwen Holdmann as a vehicle to provide critical data and analysis to make informed
decisions on energy.
ACEP started in Jan 2008 with a small amount of start up support from the university to
fund the director’s salary and their funding was vetoed by Governor Palin during the
2008 legislative session for FY09. From $0 general fund dollars and a few limited
projects in 2008, ACEP has grown to a $750,000 annual general fund budget with over
71 AEA projection based on RE Fund project status reporting.
72 Gwen Holdmann, ACEP 6.12
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$16M currently in competitively-awarded projects and has grown from a 3 person
organization to 12 full time staff and 30+ affiliated faculty.
RE Fund Support and Communication: conferences,
workshops, working groups and publications
Alaska has several mechanisms to bring experts, practitioners and interested stakeholders
together to support renewable energy projects in the state. While many of these resources
existed before the Renewable Energy Fund, many have experienced significant growth
and relevance since 2008.
Rural Energy Conference
The largest conference that addresses renewable energy projects in Alaska is the Rural
Energy Conference which is run by the Alaska Energy Authority and the Alaska Center
for Energy and Power. This conference is scheduled every 18 months and while the
primary purpose of the Rural Energy Conference was - and remains - to discuss ways to
optimize diesel power houses, through the years, this conference has also become the
primary vehicle to discuss the integration of renewables onto small grid systems and
provide updates on performance data.
The first conference was in 2002 in Fairbanks with an attendance of 25073. Since the
inception of the RE Fund, this conference has grown significantly larger. By 2007 the
conference had grown to 362 then saw a major jump to over 500 participants in 2008,
2009 and 2010 with over 600 expected in 2013. 74
This conference also provides an opportunity for vendors to connect with rural Alaskans,
project managers and funders. The 2012 conference saw over 30 vendor tables and since
2008, the conference has run out of space for vendor (non-sponsor) tables.
During interviews for the RE Fund process evaluation, many interviewees listed this
conference as one of the primary means to hear information about the RE Fund projects
and their performance. Ike Towerak, General Manager of Unalakleet Village Electric
Cooperative, indicated that his RE Fund project would not have happened without the
opportunity to meet with project developers at the Rural Energy Conference.75
Business of Clean Energy Alaska Conference76
Since the inception of the RE Fund, a new conference called the Business of Clean
Energy was created and is now in its 4th year. It is an annual conference focused on
building and supporting a clean energy economy in the state around renewables and
energy efficiency. This conference typically focuses on teaming in state and out of state
73 Rebecca Garrett, AEA.
74 Rural Energy Conference Registration Statistics
75 Interview Ike Towerak, UVEC 1.24.12
76 Chris Rose, Stephanie Nowers, Erin Jones, REAP interviews and emails July 2012.
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experts on panels to discuss success stories from the lower 48 and around the world and
the potential here in Alaska. When the conference cycles dictate that BCEA and the REC
occur 6 months away from each other, BCEA add project updates, typically from the RE
Fund projects.
It has enjoyed a relatively stable attendance of around 300 with an increasing number of
vendors, maxing out at 48 this year.
Workshops
In addition to these major conferences covering broad range of topics, over the past 3
years there have been a variety of technology specific workshops focused on renewable
topics, many led by either AEA and/or ACEP. The first of these conferences took place
in the summer of 2009 around geothermal energy. Since then Alaska hosted the
International Wind Diesel Workshop in Spring 2011, the Biomass conference later that
year, a hydrokinetic workshop in the fall of 2011, the Energy Storage workshop June
2012 and a second Biomass workshop summer 2012. These workshops typically allow
for deeper investigations into Alaska specific applications than the major conferences can
provide. These focused sessions bring together 75-100 people in the single day
conferences to 200-300 at some of the more popular technologies like wind and biomass.
Working Groups
In addition to conferences, there are six working groups focused on renewable resources
or related topics that support the energy industry in Alaska. Program managers from
AEA manage the majority of the working groups (hydropower, biomass, geothermal,
hydrokinetics, and energy efficiency). The Wind working group is run by Renewable
Energy Alaska Project through a national grant from Wind Powering America and
advised by wind program staff from AEA, NREL and ACEP.
While these working groups were in existence before the Renewable Energy Fund, the
number of participants and activity level of meeting groups has increased in almost all
cases aside from the geothermal working group, which has seen a decline in successful
projects. The majority of working groups now meet at least 3 times each year with active
members ranging from 20-40 participants and total group sizes between 100-200 names.
Wind Working Group manager, Stephanie Nowers indicates that their last remote
meeting in Kotzebue saw over 70 people attend in person with 8 additional over the
phone. She also noted an increasing number of participants from outside of Alaska.77
Renewable Energy Atlas
AEA published an inventory of energy infrastructure and resources called the Renewable
Energy Atlas in 2007, one year before the RE Fund was created. The Atlas was later
revised in 2009 and again in 2011 as new resource information became available. While
the versions are similar, revisions to the narrative adding project examples from every
77 Stephanie Nowers, REAP emails July 2012
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renewable energy subsector, reflecting the diversity and reach of the RE Fund by that
stage. In the 2011 Atlas, a specific section summarizing the RE Fund and its performance
in supporting the development of renewable energy resources in the state. An
appreciable change to the wind resource maps in 2011 reflects the addition of statewide
high-resolution wind data, especially in regards to the resolution of the data over Kodiak,
the North Slope, and through the Aleutians. The impact of the RE Fund is highlighted by
the significant increase in the number of wind projects either under construction or
operational in 2009 and 2011. The 2007 Atlas registered 2 MW of wind energy and by
2009, the map was adjusted to show that the wind capacity had doubled to 4MW. At the
end of the 5th year, if all goes according to plan, that number will increase to potentially
57MW largely due to two Railbelt wind projects – Eva Creek (24.6MW) and Fire Island
(17.6MW)78 which should be online by the fall of 2012 thanks, in part, to grants from the
RE Fund.79
Alaska Energy Wiki
The Alaska Energy Wiki is designed to make information about energy in Alaska
accessible for a wide audience to quickly find relevant information. It includes
information about energy resources and the technology developed to utilize those
resources as well as some of the challenges that these resources and technologies present.
In addition, the Alaska Energy Wiki contains information about many of the energy
related projects across the state and their current status. Additionally, the Alaska Energy
Wiki provides information and links to energy events in Alaska, as well as state, local,
and federal organizations that focus on energy related issues.
Wind Community Toolkit
This hands-on, action-oriented booklet was published in 2011 by REAP to help
communities identify tangible next steps, questions and resources if they were interested
in bringing a wind project to their community.
Wind Best-Practices Guide
Currently in peer review, the guide acts as a technical textbook for best practices in
implementing wind with diesel-hybrid systems.
Many other reports, presentations and general information brochures exist to provide
additional information to organizations or communities interested in renewable energy.
Links can be generally be found through REAP’s website or ACEP’s publication
database.
78 Fire Island is currently being developed to 17.6MW, but has the ability to be expanded to 52.8MW in
supplemental phases.
79 Renewable Energy Atlas 2007 and 2009.
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7. Conclusions
The REGRP has played an important role in supporting the development of renewable
energy systems in Alaska, serving both remote and Railbelt communities with significant
financial assistance. There is great potential for continued REGRP support to help reduce
energy costs in rural Alaska and to help the state tap more of its substantial renewable
energy resources. Looking forward, the REGRP has already created a solid foundation
for accelerating the development of renewable energy markets and infrastructure in
Alaska – and created a robust pipeline for near term project development.
This evaluation has two primary areas of focus: 1) To characterize the economic benefits
as estimated by the applicants for projects in the REGRP construction portfolio in 2011
and compare against the actual performance reported in 2011 and 2) Assess the REGRP’s
progress in meeting the stated priorities of the legislature in supporting cost-effective
projects on an equitable geographic basis and prioritizing projects in the communities
experiencing the highest energy costs.
In conclusion, despite the high costs and challenges associated with developing
renewable energy across the state, the REGRP is found to be cost-effective at both the
program and individual renewable resource sector level providing a significant net
benefit to the state. Underperformance, or alternatively, overestimation of the energy
savings in the application process, is relatively broad based. Although this can be
attributed in part to the early startup performance of many projects in 2010 and 2011, it is
a recommended area of continued focus for AEA. Improving the tracking of total system
costs and performance will contribute to future evaluation efforts, as well as assisting in
ongoing communications by program staff with industry stakeholders in establishing best
practices for project development.
The benefits of the renewable energy development in the state were characterized as
having primary economic benefits – avoided fuel, operation and maintenance costs, as
well as reducing expenditures through the Power Cost Equalization program – and
secondary benefits including avoided carbon emissions and increased employment in the
state. As the secondary benefits have direct implications to the state in creating jobs, as
well as improving air quality in Alaskan communities, creating discrete metrics for
capturing these benefits going forward will increase the value of the REGRP to the state
and the cost-effectiveness of individual projects.
The wide array of renewable resources, applicant types and geographic regions supported
by the REGRP represents an ongoing challenge to AEA in appropriately balancing
equitable distribution of funds and prioritizing projects in the communities experiencing
the highest energy costs. However, in this area as well, the REGRP is found to be
successful with two-thirds of funding being appropriated to communities with higher
97 Alaska Energy Authority
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costs of energy and a generally consistent funding success rate across different regions in
the state.
The AEA is well positioned to continue providing support through the REGRP and to
serve as an increasing knowledge base for lessons learned that will help improve future
project development and operations.
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Appendix A: RE Jobs in Alaska
In order to develop a high level assessment of job impacts from the REGRP, estimates for
individual renewable energy resource sectors were utilized from an evaluation from the
University of California – Berkeley, which compiled averages from previous RE job
impact evaluations. The averages are applied against REGRP projects currently in
operation or in the construction phase (post-grant) to develop an estimate for an
aggregate of total employment in person-years, as well as job estimates based on the
estimated project lifetime. As noted in the table below the average for job impacts is
based on both the shorter term employment in construction, installation and maintenance
(CIM) and the longer term employment in operation and maintenance (O&M).
136
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Source: Max Wei, Shana Patadia, Daniel Kammen, “Putting renewables and energy efficiency to work: How many jobs can the
clean energy industry generate in the US?”, Energy Policy, November 14, 2009.
Energy Technology Source of Numbers
CIM
(person-
years/
MWp)
O&M
(jobs/
MWp)
Fuel
extraction
&
processin
g (person-
yrs/GWh)
CIM
O&M
and
fuel
proce
ss-
ing
CIM
O&M
and
fuel
proces
s-
ing
CIM
O&M
and
fuel
proce
ss-
ing
Total Avg
Biomass 1 EPRI 2001 85%40 4.29 1.53 0.00 0.11 1.53 0.13 1.80 0.01 0.21 0.22
Biomass 2 REPP2001 85%40 8.50 0.24 0.13 0.21 1.21 0.25 1.42 0.03 0.16 0.19
Geothermal 1 WGA 2005 90%40 6.43 1.79 0.00 0.16 1.79 0.18 1.98 0.02 0.23 0.25
Geothermal 2 CALPIRG 2002 90%40 17.50 1.70 0.00 0.44 1.70 0.49 1.89 0.06 0.22 0.27
Geothermal 3 EPRI 2001 90%40 4.00 1.67 0.00 0.10 1.67 0.11 1.86 0.01 0.21 0.22
Landfill Gas 1 CALPIRG 2002 85%40 21.30 7.80 0.00 0.53 7.80 0.63 9.18 0.07 1.05 1.12
Landfill Gas 2 EPRI 2001 85%40 3.71 2.28 0.00 0.09 2.28 0.11 2.68 0.01 0.31 0.32
Small Hydro EPRI 2001 55%40 5.71 1.14 0.00 0.14 1.14 0.26 2.07 0.03 0.24 0.27 0.27
Solar PV 1 EPIA 2006 20%25 37.00 1.00 0.00 1.48 1.00 7.40 5.00 0.84 0.57 1.42
Solar PV 2 REPP 2006 20%25 32.34 0.37 0.00 1.29 0.37 6.47 1.85 0.74 0.21 0.95
Solar PV 3 EPRI 2001 20%25 7.14 0.12 0.00 0.29 0.12 1.43 0.60 0.16 0.07 0.23
Solar Thermal 1 NREL 2008 40%25 10.31 1.00 0.00 0.41 1.00 1.03 2.50 0.12 0.29 0.40
Solar Thermal 2 NREL 2006 40%25 4.50 0.38 0.00 0.18 0.38 0.45 0.95 0.05 0.11 0.16
Solar Thermal 3 EPRI 2001 40%25 5.71 0.22 0.00 0.23 0.22 0.57 0.55 0.07 0.06 0.13
Wind 1 EWEA 2008 35%25 10.10 0.40 0.00 0.40 0.40 1.15 1.14 0.13 0.13 0.26
Wind 2 REPP 2006 35%25 3.80 0.14 0.00 0.15 0.14 0.43 0.41 0.05 0.05 0.10
Wind 3 McKinsey 2006 35%25 10.96 0.18 0.00 0.44 0.18 1.25 0.50 0.14 0.06 0.20
Wind 4 CALPIRG 2002 35%25 7.40 0.20 0.00 0.30 0.20 0.85 0.57 0.10 0.07 0.16
Wind 5 EPRI 2001 35%25 2.57 0.29 0.00 0.10 0.29 0.29 0.83 0.03 0.09 0.13
Carbon Capture &
Storage J. Friedmann, 2009 80%40 20.48 0.31 0.06 0.51 0.73 0.64 0.91 0.07 0.10 0.18 0.18
Nuclear INEEL 2004 90%40 15.20 0.70 0.00 0.38 0.70 0.42 0.78 0.05 0.09 0.14 0.14
Coal REPP, 2001 80%40 8.50 0.18 0.06 0.21 0.59 0.27 0.74 0.03 0.08 0.11 0.11
Natural Gas CALPIRG 2002 85%40 1.02 0.10 0.09 0.03 0.77 0.03 0.91 0.00 0.10 0.11 0.11
Energy Efficiency 1 ACEEE 2008 100%20 0.17
Energy Efficiency 2 J. Goldemberg 2009 100%20 0.59
0.38
0.21
0.25
0.72
0.87
0.23
0.17
Work-hrs per year 2000
Capacity FactorEquipment lifetime (years)Employment Components Average Employment Over Life of Facility
Total jobs/MWp Total jobs/MWa Total person-yrs/GWh
101
Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Appendix B: List of Impact Evaluation Interviewees
The list of phone interviews, both in-person and phone, were chosen to reflect the breadth of
stakeholders affiliated with the REGRP and the diversity of perspectives and input that they could
provide a balanced evaluation of the program.
LAST FIRST TITLE ORGANIZATION TYPE REGION
Crimp Peter Deputy Director - AEEE AEA Current AEA ANC
Fay Ginny Project Manager, Economic Analysis ISER ISER ANC
Hermanson Jay Program Manager – Energy WH Pacific/NANA Advocate ANC/NW
Keith Kat Engineer – Distributed Generation WH Pacific/NANA, Former WiDAC Coordinator Advocate ANC/NW
Kohler Meera CEO Alaska Village Electric Cooperative Applicant ANC/Rural
Ott Douglas Hydro Program Manager AEA Current AEA ANC
Petrie Brent VP community Development Alaska Village Electric Cooperative Applicant ANC/Rural
Plentovich Devany Biomass Program Manager AEA Current AEA ANC
Rose Chris
Executive Director, Business/Organization
involved in renewable energy Renewable Energy Alaska Project REFAC ANC
Stromberg Rich Wind Program Manager AEA Current AEA ANC
White Clinton STG Project Developer ANC
102 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Appendix C: Operational, Construction and
Pre-Construction Projects
Project
ID Project Name RE Resource
Type Portfolio
68 Anchorage Landfill Biomass Construction
605 Biomass Fuel Dryer Project Biomass Construction
53 Biomass-fired Organic Rankine Cycle System Biomass Construction
15 Chistochina Central Wood Heating Construction Biomass Construction
476 City-Tribe Biomass Energy Conservation Biomass Construction
26 Cordova Wood Processing Plant-Purchase and setup Biomass Operational
112 Delta Junction Wood Chip Heating Biomass Construction
445 District Wood Heating in Fort Yukon Biomass Construction
2 Gulkana Central Wood Heating Construction Biomass Operational
33 Haines Central Wood Heating Construction Biomass Construction
649 Kenny Lake School Wood Fired Boiler Biomass Construction
681 Lake and Peninsula Wood Boilers Biomass Construction
623 Susitna Valley High School Wood Heat Biomass Construction
211-
636 Thorne Bay Wood Boiler Biomass Construction
49 Tok Wood Heating Construction Biomass Operational
453
Alaska Sealife Center Ph II Seawater Heat Pump
Project Geothermal Construction
705 Japonski Island Boathouse Heat Pump Geothermal Construction
999 Juneau Airport Ground Source Heat Pump Constr Geothermal Operational
307 Ambler Heat Recovery Construction Heat Recovery Construction
22 Cordova Heat Recovery Construction Heat Recovery Construction
687 Hoonah Heat Recovery Project Heat Recovery Construction
103 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
235 Kotzebue Electric Heat Recovery Construction Heat Recovery Construction
61 McGrath Heat Recovery Construction Heat Recovery Operational
105 North Pole Heat Recovery Construction Heat Recovery Operational
244 Point Lay Heat Recovery Construction Heat Recovery Construction
448 Saint Paul Fuel Economy Upgrade Heat Recovery Construction
271 Unalaska Heat Recovery Construction Heat Recovery Construction
469 Akutan Hydroelectric System Repair and Upgrade Hydro Construction
58 Chuniisax Creek Hydroelectric Construction Hydro Construction
10 Falls Creek Hydroelectric Construction Hydro Operational
21-407 Humpback Creek Hydroelectric Construction Hydro Operational
23 North Prince of Wales Island Intertie Project Hydro Operational
688 Pelican Hydroelectric Upgrade Project Hydro Construction
629 Reynolds Creek Hydroelectric Project Hydro Construction
672 Snettisham Transmission Line Avalanche Mitigation Hydro Construction
653 Terror Lake Unit 3 Hydroelectric Project Hydro Construction
37-620 Whitman Lake Project Hydro Construction
9 Wrangell Hydro Based Electric Boilers Construction Hydro Construction
660 Cook Inlet TidGen Project Hydrokinetic Construction
641 Kaltag Solar Construction Solar Construction
108 McKinley Village Solar Thermal Construction Solar Operational
122-
604 Bethel Wind Power Project Times Four Wind Construction
102 Delta Area Wind Turbines-Construction Wind Operational
302 Emmonak/Alakanuk Wind Design and Construction Wind Operational
616 GVEA Eva Creek Wind Turbine Purchase Wind Construction
85-518 High Penetration Wind-Battery-Diesel Hybrid Wind Construction
104 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
110 Kongiganak High Penetration Wind-Diesel Smart Grid Wind Construction
107 Kwigillingok High Penetration Wind-Diesel Smart Grid Wind Construction
72 Mekoryuk Wind Farm Construction Wind Operational
52 Newton Peak Wind Farm Wind Construction
89 Nikolski Wind Integration Construction Wind Construction
47
Nome Banner Peak Wind Farm Transmission
Construction Wind Operational
103 Pillar Mountain Wind Project - Construction Wind Operational
486 Pilot Point Wind Power & Heat Wind Construction
70 Quinhagak Wind Farm Construction Wind Operational
317 Sand Point Wind Construction Wind Operational
303 Shaktoolik Wind Construction Wind Construction
90 St. George Wind Farm Construction Wind Construction
503 St. Paul Wind Diesel Project Wind Construction
71 Toksook Wind Farm Construction Wind Operational
273 Tuntutuliak High Penetration Wind-Diesel Smart Grid Wind Construction
50 Unalakleet Wind Farm Construction Wind Operational
105 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Appendix D: Bibliography
Alaska Energy Authority Reports and Documents
Alaska Energy Authority Program Fact Sheet: Renewable Energy Fund, December 5, 2011
http://www.akenergyauthority.org/FactSheets/AEA_ProgramFS_ReFUND.pdf
Alaska Energy Authority, Request for Applications (RFA) AEA12-001 for Renewable Energy
Grant Program Round V, July 1, 2011
http://www.akenergyauthority.org/re-fund-
5/2_Project_Specific_Docs/R5_RFA_ApplicationForms.pdf
Alaska Energy Authority, 2011 Report to Alaskans, December, 2011
http://www.akenergyauthority.org/Reports%20and%20Presentations/2011%20AEA%20
Report%20to%20Alaskans.zip
Alaska Energy Authority, 2011 RE Fund Performance Report spreadsheet, March, 2012
REF_Performance_Report_MasterFile_avm_03262012.xlsx
Alaska Energy Authority, 2011 REGRP Application Database, March, 2012
Applications and community-3.xlsx
Alaska Energy Authority, 2012, Alaska Renewable Energy Fund Status Report & Appendix -
January 21, 2012
http://www.akenergyauthority.org/re-fund-5/4_Program_Update/StatusReport2012.pdf
http://www.akenergyauthority.org/re-fund-
5/4_Program_Update/StatusReport2012Appendix.pdf
“Alaska’s Renewable Energy Fund at Year 5: What’s Next” – Presentation at the 2012
Business of Clean Energy Conference, Peter Crimp, April, 2012
Alaska’s Renewable Energy Fund at Year 5: What’s Next (.pdf)
Alaska Authorizing Legislation and Regulatory Orders
Alaska HB 152, 2008 Session
http://www.akenergyauthority.org/RenewableEnergyFund/Chapter31_SLA08_HB152.pdf
Alaska State Statutes & Administrative Code - 2011, Sec. 42.45.045, Renewable energy grant
fund and recommendation program
http://www.legis.state.ak.us/basis/folioproxy.asp?url=http://wwwjnu01.legis.state.ak.us/cgi-
bin/folioisa.dll/stattx09/query=*/doc/{t17270}
Alaska Resource Assessments
Renewable Energy Atlas of Alaska, Alaska Energy Authority, August, 2011
ftp://ftp.aidea.org/AEAPublications/2011_RenewableEnergyAtlasofAlaska.pdf
106 Alaska Energy Authority
Renewable Energy Grant Recommendation Program
Impact Evaluation
Alaska Energy Pathway Toward Energy Independence, Alaska Energy Authority, July 2010
ftp://ftp.aidea.org/AlaskaEnergyPathway/2010EnergyPathway8-12Press.pdf
Prior Evaluations
Fay, G., P. Crimp, and A Villalobos-Melendez, 2011, Alaska Renewable Energy Fund: How it
Works and Lessons We’ve Learned, Technical Report, Institute of Social and Economic
Research, University of Alaska Anchorage in collaboration with the Alaska Energy Authority,
prepared for the 8th International Conference on Environmental, Cultural, Economic and Social
Sustainability, 19 pages. Review Draft.
Utility and Other Plans for Renewable Development
Southeast Alaska Integrated Resource Plan: Draft Technical Report December, 2011
http://www.akenergyauthority.org/seirp-comments.html
Additional Resources
Evaluating Renewable Energy Programs: A Guide for Program Managers, Clean Energy States
Alliance, June, 2011
http://www.cleanenergystates.org/assets/Uploads/CESA-Program-Evaluation-paper-final-
6.15.11.pdf
Alaska Green Jobs Report June 2011, Alaska Department of Labor and Workforce Development
http://labor.alaska.gov/research/greenjobs/greenjobs.htm
Energy for a Sustainable Alaska: The Rural Conundrum. Commonwealth North, February 2012.
http://www.commonwealthnorth.org/index.cfm?fa=docjump&documentid=589 - Energy
for a Sustainable Alaska – The Rural Conundrum1.pdf
Ginny Fay and Tobias Schwörer, Institute of Social and Economic Research
University of Alaska Anchorage, Alaska Isolated Wind-Diesel Systems: Performance and
Economic Analysis, June 2010
http://www.iser.uaa.alaska.edu/Publications/wind_diesel10022010.pdf