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HomeMy WebLinkAboutAkAES REFAC 06282016Alaska Affordable Energy Strategy Update to Renewable Energy Fund Advisory Committee Photo by: Cassandra Cerny, GVEA Neil McMahon June 28, 2016 What is the Alaska Affordable Energy Strategy (AkAES)? 2 Senate Bill 138 Alaska Affordable Energy Strategy Plan and recommendations to the Legislature on infrastructure needed to deliver affordable energy to areas in the state that do not have direct access to a North Slope natural gas pipeline. Started: May 2014 Report and Proposed Legislation Due: January 1, 2017 3 4 Over 200 Communities Over 165,000 people AkAES Planning Horizons Short-term: 1.With the current budget climate, what can the state do to maximize the reduction in community energy costs? a.For example, how to spend a hypothetical $1M to best benefit a community? b.Where will the hypothetical $1M come from? 2.Test options to prepare the state for the long-term plans Long-term: 1.How should the state invest money available through the Affordable Energy Fund to provide the maximum benefit to communities? 5 Sectors Addressed Residential: Electricity & Heating Costs Public Facilities (including water/sewer): Electricity & Heating Costs Private Commercial Facilities: Electricity & Heating Costs Not Addressing: Industrial Transportation (within and between communities, except for delivery of fuel or energy-related infrastructure) 6 Capitalize on Previous Efforts Pathways, regional energy planning, many previous studies Alignment with Administrative Order 272 (consumer energy group) Advisory Group Technical Advisory Group Regional Organizations: TCC, Nuvista, SEC, NWAB, SWAMC Government Agencies & Entities RCA, ISER, ACEP, DOT&PF, AGDC, AHFC, GINA, US DOE, USACE Utilities IPEC, AVEC, AP&T, Avista NGOs AFN, ANTHC, CCHRC Private Crowley, VEIC, Northern Economics, others 7 Stakeholder Engagement Expected Outcomes of the AkAES AkAES Deliverables: Prioritized list of program-level recommendations for the Legislature Improvements to current programs New programs (loans, incentives, assistance) to fill identified gaps Regulations, codes, or other requirements that will lead to cost effective energy cost reductions Useful tools and data for communities and regions to help prioritize projects, reduce planning and transaction costs 8 Opportunities for Reducing the Cost of Energy to Communities 9 Factors That Lead to Consumer Energy Costs 10 Total Consumer Energy Cost Consumer Heating Fuel Cost Consumer Electricity Cost Consumer Heating Fuel Consumption Consumer Heating Fuel Rate Consumer Electricity Consumption Consumer Electric Rate Infrastructure Energy Efficiency Diesel Efficiency Renewable Energy Transmission & Interties Fuel Delivery & Storage Fuel Switching Non-infrastructure Direct Underwriting (subsidies) Management Improvements Ownership & Project financing 11 Areas of Study for Affordable Energy Infrastructure opportunities modeled on best available: Community-level data Project-type costs Project-type performance Population forecasts Diesel price forecasts Modeled opportunity for: Efficiency Residential, non-residential, water/wastewater Renewables Wind, solar, hydro power Heat Recovery Biomass (cordwood, pellets) Air source heat pumps Transmission Diesel efficiency 12 Infrastructure Opportunities for Affordable Energy in Communities We will be able to compare the potential opportunities in a community to assist the communities in making sound investment decisions Preliminary Results More work to still be completed 13 Significant opportunity remains for Residential & non-residential energy efficiency for both heat and electric Regionally & locally significant opportunity exists for: Fuel delivery upgrades Renewables—biomass, wind, ASHPs Less opportunity exists for: LNG has a low chance of being economically viable for either electricity or thermal loads Solar has a low chance of being economically viable for utility-scale electricity generation 14 Preliminary Model Output Results Additional models are still in development: •Hydro, diesel efficiency, heat recovery, and interties Project Development & Non-Infrastructure Opportunities Improvements possible across the entire project development cycle—for funding agencies and utilities 1.Initial project selection 2.Coordination between stakeholders 3.Access to financing 4.Project implementation: feasibility through design a)Find fatal flaws early, if possible 5.Utility management and project operation 15 Significant Opportunity = Significant Investment There is more need & more opportunity than can be accomplished through state funds alone The state will need to provide new types of assistance to communities to help them access existing state, federal, NGO, and private financing opportunities Careful coordination between stakeholders will be needed to deliver the current services with fewer state grant dollars Alignment of policy, regulations, and financing/incentives will be needed 16 Opportunity Afforded by AkAES Provides a foundation and requirements to suggest statutory changes Improve operational efficiency for AEA, other governmental & non-governmental actors Financial Project evaluation Project selection Improve coordination Integration and sharing of data and information AEA will be able to serve communities better 17 AKEnergyAuthority.org 18