ALASKA ENERGY A first step toward energy independence. A Guide for Alaskan Communities to Utilize Local Energy Resources January 2009 Prepared by: Alaska Energy Authority Alaska Center for Energy and Power PB 1 Copyright Information: This publication for a Statewide Energy Plan was produced by the Alaska Energy Authority per legislative appropriation. The report was printed at a cost of $12.00 per copy 2 in black and white, and $58.00 per 3 copy in color in Anchorage, Alaska by Standard Register. Table of Contents 6 Sustainable Energy for Alaskans 8 How this Document Should be Used 17 Railbelt Region 22 Energy in Alaska 33 History of Energy Policy in Alaska 38 Current Energy Policy and Planning in Alaska 44 Policies with Energy Implications 55 Permitting 57 Technology Chapters 58 Diesel Efficiency and Heat Recovery 74 Efficiency (End-Use) 84 Hydroelectric 101 Wind 120 Biomass 135 Geothermal 150 Heat Pumps 156 Solar 161 Coal 168 Natural Gas 175 Delivery 179 Energy Storage 190 Hydrokinetic/Tidal 204 Wave 211 Nuclear 217 Coal Bed Methane 223 Fuel Cells 224 Alternative Fuels 232 Explanation of Database Methodology Copyright Information: 240 Glossary This publication for a Statewide 242 Units of Measure Energy Plan was produced by the Alaska Energy Authority per legislative 243 Acronyms - List of Organizations appropriation. The report was printed at a cost of $12.00 per copy 244 Acknowledgements 2 in black and white, and $58.00 per 3 copy in color in Anchorage, Alaska by Standard Register. The narrative and model in this report are designed to provide information to engage Alaskans who have a passion to provide energy solutions, stimulate the Alaskan economy and provide leadership for the benefit of all Alaskans. Alaska has had many high-quality energy plans written over the years, but none ever gained traction to come to fruition. To increase the likelihood that energy solutions will become a reality, the new approach will engage Alaskans in the solution and invite their active participation in the selection and ownership of their alternative energy sources. The safe approach to conducting this work would have been to hire a consultant. With some risk but a large increase in the service to Alaskans, the Alaska Energy Authority chose to utilize the expertise of in-house staff. This personal accountability by the professionals at AEA will help ensure Alaskans have access to energy information and a single location they can work with to resolve their energy challenges and opportunities. As more information becomes available, the information will be placed in the energy model for use by decision makers long into the future. Steven Haagenson Statewide Energy Coordinator 4 5 4 5 Sustainable Energy for Alaskans We Alaskans live in a magnificent state that has dependence on petroleum. This effort must be many blessings when it comes to energy, but also approached as a team effort, where each participant, some curses. Alaskans live in a state with abundant private or public, can provide value for permitting, energy resources, but are hampered by long distances construction, applied research and development, and low usages. natural resource management, financing, workforce development in management, design, business, The Alaska Energy Authority (AEA) has developed construction, operations, economic development, this document to act as a first step toward energy wealth retention, and leadership. independence for Alaskans. The document contains two main sections - a narrative which you are Alaska Energy - First Steps reading now, and a technology screening tool we have developed to allow each community to review locally available resources and determine the least- The first step in creating this document was to cost energy options based on the delivered cost of identify each community’s current energy needs energy to residents. for electrical generation, space heating, and transportation. It is important to know these values Energy use in each community is composed of three as they provide a reference or measuring stick major components: electricity, space heating, and against which we can measure alternatives. Electric transportation. The relative level of use and cost for power usage was obtained directly from current PCE each of these components differs across Alaska. For reports, while heating oil and transportation was instance, Anchorage residents pay comparatively estimated by the Institute of Social and Economic less for electricity and space heating, but more for Research (ISER) based on modeling. transportation due to heavy dependence on vehicle travel. Rural Alaskans see lower vehicle travel, AEA conducted 28 Town Hall Meetings across the but have much higher costs for heating oil and state, engaging many Alaskans through the process electricity. of seeking answers to three fundamental questions: 1) What resources near your community - where All of America is struggling with the high cost of you live, work, play, fish, and hunt - could possibly energy, but Alaskans have the resources, the ability, be developed to help lower energy costs? 2) What and the motivation to create long-term solutions that resources should not be developed? 3) Why not? will greatly benefit our children and grandchildren. AEA’s goal in developing the Alaska Energy Plan is The information gathered from these Town Hall to reduce the cost of energy to all Alaskans through Meetings was used to develop a resources matrix deployment of energy technologies that are vertically for each community. Potential resources identified integrated, economic, long-term stably priced, and included hydroelectric, in-river hydro, wind, solar, sustainable. wave, tidal, biomass, geothermal, municipal waste, natural gas, propane, coal, diesel, coal bed methane, In order to achieve this goal, we will be engaging and nuclear. Also identified were opportunities Alaskans throughout the state who have the expertise for gasification and production of Fischer-Tropsch liquids. and passion to use local resources to reduce their 6 7 Sustainable Energy for Alaskans For each resource, AEA formed Technology Teams made up of people with expertise and a passion for energy solutions who were asked to identify technologies options and limitations for each identified resource. The Alaska Center for Energy and Power (ACEP) at the University of Alaska was brought in initially to help guide the technology discussions, and ultimately went above and beyond in their work on the narrative and the comparative database. Appropriate technologies for each fuel have been identified. Capital and operations and maintenance costs for each technology have been determined and adjusted by region through use of factors developed by HMS Construction Cost Consultants. The net result is a focusing tool that will provide each community with a high-level snapshot of the least-cost options for electricity, space heating, and transportation for their community. Prices will be based on a delivered cost that includes capital cost for infrastructure. The delivered cost number can be used to quickly compare the alternative energy options to diesel fuel based on a range ($50-$150) of crude oil prices. This first step in the ongoing Energy Plan is intended to provide a high-level tool to focus each community on its relative options for generating electricity and heat through the use of locally available resources. This is an important step in developing a community, regional, and statewide energy plan. This process is intended to occur in stages, and it allows the state to provide assistance with maximum support and buy-in from Alaskans. Starting at the local level and using this plan as a building block to develop regional and statewide energy plans, the goal is to engage citizens directly in developing energy solutions for Alaska. 6 7 How this Document Should be Used The illustration on this page shows a sample within the cost range for diesel equivalent with crude community energy meter. The energy meter is part oil between $50/bbl and $150/bbl. The $50-$150 of the technology screening tool and allows for a range is considered the Yellow Zone and can include quick comparison between alternative energy options the entire range of energy alternatives. based on a range of future crude oil prices for each Some communities have options that exceed community in the state. As part of this screening the diesel equivalent of $150/bbl. This range is analysis, current electric and space heating costs are considered the Red Zone and indicates resources compared on a total cost basis with capital, operation that are probably not cost-effective to develop at and maintenance (O&M), and fuel costs for various this time. If no other resources exist, a broader technologies. The focus is on near-term, commercial, regional evaluation should be conducted to search and proven for available options technologies, in nearby communities although an with Green or Yellow assessment Zone resources. The of some pre- high cost is likely a commercial or function of the size of potential future the community, or the options are also distance to available included. resources. The options for In some communities, each community the resource capability are compared with is much larger than the current cost of the current energy energy as well as requirements of the a diesel equivalent community. For range of $50/bbl resources developed to crude oil (low their full capacity but projection) to $150/bbl (high projection). There only using a portion of the energy, the cost would are many communities with access to alternative be high and could shift into the Red Zone. This is resources that can potentially provide energy at a the case with some of the larger hydroelectric and cost below the diesel equivalent of $50/bbl crude oil. geothermal resources. In this case, the community A sub $50 resource is defined as the Green Zone and could look at ways to use excess capacity from the can include wood (biomass) heat and wind/diesel resource to spur economic growth opportunities and options in the short term, as well as hydroelectric or lower the cost of energy to residents.