HomeMy WebLinkAboutNov 2018 REFAC MeetingREDUCING THE COST OF ENERGY IN ALASKA
Renewable Energy Fund
Advisory Committee
Cady Lister
Deputy Director & Chief Economist
REDUCING THE COST OF ENERGY IN ALASKA
SAFE,
RELIABLE, &
AFFORDABLE
ENERGY
SOLUTIONS
November 21, 2018
REDUCING THE COST OF ENERGY IN ALASKA 2
AEA’s mission is to reduce the cost of
energy in Alaska
SAFE,
RELIABLE, &
AFFORDABLE
ENERGY
SOLUTIONS
REDUCING THE COST OF ENERGY IN ALASKA 3
Agenda
9:00am-9:15am Welcome and Introductions
9:15am-9:20am Approve minutes and agenda
9:20am-10:20am AEA Follow-up from August meeting
10:20am-10:30am Break
10:30am-11:30am Guidance for March RFA considerations
11:30am-11:45am Schedule and location for next meeting
11:45am -Noon Member comments and adjourn
REDUCING THE COST OF ENERGY IN ALASKA 4
Finding REF match
Current AEA renewable activity outside REF
•Federal/state funds support grants for biomass feasibility and training
•State funds to support wind, biomass and hydro education/outreach, resource
assessment, technical assistance and project development
•Heat recovery has been included in RPSU in past
REDUCING THE COST OF ENERGY IN ALASKA 5
Finding REF match
Primary points of 4-pager
•Program and staff in place
•Thorough technical review
•High level of expertise
•Sophisticated economic evaluation
•Process informed by experience
•Statewide view
•Broad based buy-in
•Potential to match funds
REDUCING THE COST OF ENERGY IN ALASKA
0%5%10%15%20%25%30%
Other reasons
Poor design
Other upgrades needed
Competing project(s)
No agreement with utility
Unspecified technical issues
Insufficient demand
Land use restrictions
Insufficient resource
Low community priority or no champion
Insufficient funding
Challenged economics
Percent of non-operational REF projects
Reasons why REF projects are not expected to continue
Source: AEA project managers (2016)
6
Project failure point analysis –technical risks and barriers
REDUCING THE COST OF ENERGY IN ALASKA 7
Project failure point analysis –key takeaways
1.General risks include lack of resources including skilled labor in villages and limited
pool of specialized contractors in Alaska; lack of leadership or stakeholder buy in;
immature or inappropriate technology; challenging economics and financing; poor
project management or maintenance; and weather or climate-related events.
2.Risks, including future operational and financing risks, should be thoroughly addressed
in project selection criteria. Many communities have pursued projects that are not
likely to be cost-effective.
3.Project funding should be committed to projects that have community support and
have examined other potential technologies.
REDUCING THE COST OF ENERGY IN ALASKA 8
Project failure point analysis –key takeaways
4.Programs should use standardized criteria to approve projects at each stage of
development before the decision is made to move forward.
5.Have clear financing and business plans, from conception through operation.
6.Inadequate maintenance is the main barrier to performance. The risk of project
performance or economic life not meeting expectations applies to all project and
technology types, but can be mitigated through proper maintenance and training.
7.Climate change is expected to increase the need for infrastructure funding in the state.
REDUCING THE COST OF ENERGY IN ALASKA 9
PCE eligible utility costs FY07 to FY17
$0
$20
$40
$60
$80
$100
$120
$140
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17Millions
Total Fuel Costs Total Non-Fuel Costs
REDUCING THE COST OF ENERGY IN ALASKA 10
PCE kWh sales graph
0
50
100
150
200
250
300
350
400
450
500
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17Millions
Total kWh's Sold PCE-Eligible kWh's Sold
11.2 percent growth in total
kWh sales over 11 years
9.7 percent growth in PCE
eligible kWh sales over 11 years
REDUCING THE COST OF ENERGY IN ALASKA 11
BREAK
REDUCING THE COST OF ENERGY IN ALASKA
March 1, 2019 RFA
12
AEA is seeking REFAC guidance to help inform the March 1, 2019
RFA. Ideas that have been discussed in the past include:
1.Incentivizing efficiency
2.Increasing local match
3.Focus on a specific project phase
4.Incentivizing O&M planning
5.Focus on heat projects
REDUCING THE COST OF ENERGY IN ALASKA 13
Wrap up
Next meeting
Member comments
Adjourn
REDUCING THE COST OF ENERGY IN ALASKA 14
SAFE,
RELIABLE, &
AFFORDABLE
ENERGY
SOLUTIONS
ALASKA ENERGY AUTHORITY
813 West Northern Lights Blvd.
Anchorage, Alaska 99503
Phone: (907) 771-3000
Fax: (907) 771-3044
Toll Free 888-300-8534