ALASKA NEEDS NEW ENERGY

Utilities look to renewables as natural gas dwindles
Tim Bradner, April 28, 2011 (Alaska Journal of Commerce)

"Despite its high costs, renewable energy is a good risk-management strategy for Southcentral Alaska electric utilities, which currently depend heavily on natural gas for power generation…[because] natural gas reserves are running down…

"Renewable energy – wind, hydro and geothermal – can be expensive at the front-end but its key advantage, in the long run is that the fuel is free…The state and the Railbelt utilities partnered to build the Bradley Lake dam near Homer [20 years ago]…Natural gas prices have since doubled from what they were 20 years ago but the cost of Bradley Lake hydro power has been stable and low…"

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"Cook Inlet Region Inc.'s planned $160 million Fire Island wind project…[has met] difficulties in securing power sales agreements with local utilities…[but if] it's just business-as-usual, and aside from the gas supply issue, Alaskans in the Railbelt communities will spend an estimated $60 billion to purchase fossil fuels over the next 20 years, money that flows out of the state's economy, and this doesn't assume any increases in price…In rural Alaska, where communities are heavily reliant on diesel, $6 billion will be spent…[so there] are about 30 wind projects operating in rural communities in combination with conventional diesel generation.

"While a portfolio of energy supplies is important, conservation is key, and Alaskans have proven successful in this. The state's popular energy rebate program, which refunds homeowners' investments in energy efficiency, is a demonstrated success…The state has mandated energy efficiency measures for public buildings. These things are important because studies show that about 50 per cent of the total "life-cycle" cost of a structure over time is in operating costs, and much of that is in heat and power…Only about 17 percent of total costs is actual construction."

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"The good news is that a variety of renewable energy options are available to utilities in Southcentral and Interior Alaska…[including] the Fire Island wind project and also a potential geothermal resource at Mount Spurr…Ormat Nevada, a geothermal company, plans to resume testing this summer…Mount Spurr could provide 50 megawatts to 100 megawatts to the Southcentral grid…[if] a 40-mile transmission line [is built]…Geothermal power projects are typically online 99 percent of the time, which beats even gas-fired power generation…

"There are other wind projects that could feed power into the Railbelt grid…Integration of variable wind power into a local grid, which requires the assurance of steady, reliable power, is always a challenge…[but the] Kodiak Electric Association has solved this…There are smaller hydro projects in the region, too…"