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Initiating Renewables in Rural Alaska

Diversifying energy sources to keep the lights on


Rural Alaska has some of the highest energy costs in the nation, particularly in villages not on a road system or to a major waterway.

Turning lights on or charging up a cell phone is often more complicated than simply flipping a switch or plugging in a cord: in some communities, power must be rationed or the whole community will go dark.

From building new sources of energy generation—wind, hydro, biomass and heat recovery system—to installing in-home energy monitors, electrical cooperatives and community groups across rural Alaska are working on projects that aim to chip away at the high power costs.

“Right now rural communities are entirely dependent on diesel fuel for heat … and power generation,” says Dennis Meiners, a principal at Anchorage alternative energy company Intelligent Energy Systems. Meiners formerly worked for the state-run Alaska Energy Authority and is familiar with energy issues across the state.

“They’re completely dependent on fossil fuels for heat and power generation. Those prices have been going up and up and up,” he says.

Alaska Energy Authority Tasked to Help

That’s where the Alaska Legislature stepped in. Over several years the Legislature has developed a few ways to help rural communities offset high power bills.

The Alaska Energy Authority is tasked with helping rural communities lower their energy costs. Its rural power system upgrade and bulk fuel storage programs have helped pay for costly upgrades and its Power Cost Equalization program directly subsidizes power bills for rural residents across the state.

Alaska Energy Authority spokesman Karsten Rodvik says the rural power system upgrade program helps communities replace inefficient power generators with new technology, cutting fuel consumption and often increasing reliability. To date, AEA has spent about $100 million on power system upgrades, he says.

“It’s not uncommon to see a 30 percent decrease in fuel consumption after a new powerhouse is completed and installed,” Rodvik says.

According to Rodvik, Akiak will get a new $4 million power plant this year. It’s a self-contained powerhouse built to fit on a barge, and holds four 220 kilowatt generators. The upgrade also includes a $200,000 heat recovery system and is expected to save the community 18,000 gallons of fuel each year.

A new $3.7 million powerhouse is also being built in Hoonah, and is designed to work with a not-yet-built hydropower project on nearby Gartina Creek. The plant’s $1.2 million heat recovery system is expected to save the community 57,000 gallons of fuel each year.

“These are remarkable,” Rodvik says. “It’s the latest generation of diesel technology.”

State Upgrades Rural Diesel Use

Since 2000, more than $204 million has been spent by the state to upgrade community bulk fuel systems. In rural Alaska, where communities must rely on barge or plane shipments of diesel fuel to power community generators, this program replaces old, leaking fuel tanks with new ones.

This year, new bulk fuel storage facilities should be installed in Nunam Iqua, Bettles and Aleknagik, Rodvik says. Hoonah is also getting a $3.4 million, 260,000 gallon bulk fuel storage facility, which will replace tanks that were no longer in compliance.

The Energy Authority partners with the federal Denali Commission to fund both the bulk fuel storage upgrade program and the rural power system upgrade program.

One of the most well-known ways the Energy Authority addresses high fuel costs is through the Power Cost Equalization program. The PCE, as it’s called, helps reduce the cost of power to rural residents by using state money to offset high fuel costs.

In 2011, the Energy Authority used $31.8 million to offset high fuel costs across the state. According to a 2011 year-end report from the Energy Authority, more than 77,000 people in 183 communities across the state qualified to participate.

Popular State Grant Program Helps Boost New Projects

One of the Energy Authority’s most popular programs is a relative newcomer. If Gov. Sean Parnell approves the program’s fifth round of grant funding, the Renewable Energy Fund will have distributed a total of $202 million so far, says Peter Crimp, deputy director of alternative energy and energy efficiency for the Energy Authority.

Across the state, 215 projects have received REF funding, Crimp says. Most—131 of them—received preconstruction funding, and 84 are in the construction phase.

By 2015, the 84 projects either completed or in construction should offset about 14 million gallons of diesel fuel each year, he says. The state expects communities will save about $35.3 million a year on fuel costs.

“There are fairly good economics on these projects. Fairly speaking, these are 20 to 25 year (lifespan) projects,” he says, adding that hydropower projects have about twice that lifespan. “That’s a fairly good rate of return.”

The fund underwrites traditional renewable energy projects such as wind and hydro to biomass, as well as biomass and heat recovery projects, which heat community buildings with waste wood or waste heat generated by other sources.

Wind and Hydro Together

The Renewable Energy Fund helped pay for a massive wind project on Kodiak Island, a project some call the fund’s poster child for wind projects. On Pillar Mountain, Kodiak installed three turbines that together produce 4.5 megawatts of wind power in 2009, about 9 percent of the Kodiak Electric Association’s power needs.

“That’s a good example of a place that has been very aggressive about marrying wind and hydro together,” Crimp says.

About 75 percent of Kodiak Electric Association’s power in 2011 came from its 20-megawatt Terror Lake hydropower project. Alaska Energy Authority is helping KEA pay to add a third turbine, increasing the output to 30 megawatts. The Energy Authority paid $248,000 toward studies and design, and the Legislature last year approved $3.75 million toward the $15 million project cost.


Lineman Ed Hall installs five-foot ladder sections on a transmission line tower leading to Kodiak’s hydroelectric power project, Terror Lake, last August.

Photo courtesy of Kodiak Electric Association

KEA also plans to add three more 1.5-megawatt turbines to its Pillar Mountain wind farm, a project the utility hopes to finish this fall. On its website, the utility states that the additional wind and hydro turbines will allow it to provide 98 percent of its power from renewable resources.

“Shifting our source of electric energy from diesel to fuel-free renewables not only lowers the cost of power but it also stabilizes the cost of power,” wrote KEA president Darron Scott in a September president’s report posted at the KEA website. “The fewer gallons we need to generate electricity, the less impact volatile fuel prices have on our communities.”

Wind power projects are some of the most popular ways to use the Renewable Energy Fund. A list of active projects shows 21 wind projects, more than any other category of project funded. Ten of those were in operation in 2011.

Hydropower projects are also popular: 11 hydro projects have been funded, four of which were in operation in 2011. A $7.2 million hydropower project in Atka, at Chuniisax Creek, is scheduled to be online this year, Crimp says. Studies estimate that project will save the community about $240,000 a year in reduced diesel costs.

More popular than hydro projects, at least by Renewable Energy Fund standards, are biomass projects. Fifteen have received Renewable Energy Fund money; three were operating in 2011.

Biomass Gaining Popularity

Biomass projects use wood chips or other combustible materials as a low-cost source of energy. In 2010 the Alaska Gateway School District used Renewable Energy Funds to add a 60-by-90-foot metal building next to the Tok School to house an efficient boiler, wood chip pit and other components to heat the school.

The project uses waste wood to heat the school. Tok is in an area where hazardous wood becomes a danger during summer fire season. State foresters identified about 30,000 acres of hazardous fuel in the area, enough to fuel the school for hundreds of years. Project supporters have said their dilemma is to either burn the waste wood safely or risk losing private property and endangering residents and livestock when fires strike. Tok expects to save more than $180,000 a year in diesel costs.

“That project has a lot of other benefits; using the local biomass has cleared it for wildfire mitigation, there are cost savings at the school and it stimulates economic development,” Crimp says.

Also according to Crimp, Similar projects are in the works around the state, including projects to heat schools in Delta Junction, Kenny Lake, Talkeetna and Thorne Bay. Tanana in 2007 added two Garn wood-burning boilers and uses local firewood or driftwood floating by to heat the community washeteria and other community buildings. A University of Alaska Fairbanks report showed diesel fuel consumption dropped by 30 percent. The community is currently working to expand the project.

Heat Recovery

Heat recovery is also a category of renewable funding that is gaining interest.

Wasillie Lupie prepares to upgrade electrical elements and system controls of the thermal storage units being installed in Tuntutuliak as part of the Chaninik Wind Group’s plan.

Photo courtesy Martin Leonard

“Many people think of renewable energy being just energy projects, but when you look at the amount of energy used to heat buildings, about three-quarters of it is heat and one-quarter of it is power. The heat is what is eating people alive,” Crimp says.

Although about 80 percent of the Renewable Energy Fund grant money has gone for power projects, Crimp says the fund’s governor-appointed advisory committee is encouraging Energy Authority staff to encourage communities to apply for projects to address heating costs.

Learning to Live on 500 Kilowatt Hours

Alaska Village Electric Cooperative is one of the largest retail cooperatives in the nation, serving 56 villages between Kivalina, near Nome, and Old Harbor on Kodiak Island.

The cooperative is working with the Association of Village Council Presidents and the Alaska Native Tribal Health Consortium to help 4,200 electrical consumers — some AVEC members and some in other communities—lower their energy bills by giving them more information.

The electric cooperative bought a few pallets full of The Energy Detective (or “TED”) monitors to be placed in homes in communities that are participating in the program. A small radio transmitter will be installed in each home’s meter panel. The transmitter sends a radio signal to the monitor, which is plugged into a wall outlet. AVEC president Meera Kohler said the device acts like a small clock, showing what items are currently using power and what it’s costing the homeowner in real time.

The devices were being programmed at AVEC’s Anchorage warehouses in May and will be installed this summer. Each device is programmed with community-specific information, Kohler says.

“It’s tied in with the PCE cycles,” Kohler says. “It starts warning you when you get to 400 kilowatt-hours—and when you get to 500, it starts blinking red.”

Power Cost Equalization doesn’t apply to energy use over 500 kilowatt hours, so residents pay full rates for anything over that threshold. Kohler says residents have previously been unable to tell when they were approaching the cutoff. Some were unpleasantly surprised to get bills in which more than half was due to overage charges.

Kohler says the monitoring devices will belong to the homeowners, and AVEC and other utilities can’t view the readouts. But she believes they will be a great tool for residents.

“It might ultimately translate, at least for us, to a very modest decline in diesel used to generate electricity,” she says.

Reducing Diesel Dependence

While AVEC is teaming up with villages in its region to give consumers more knowledge, four communities in Western Alaska are working together in an effort to directly decrease energy costs for their residents.

Residents in Kipnuk, Kohngiganak, Kwigillingok and Tuntatuliak teamed up in 2005 to create Chaninik Wind Group and find ways to reduce energy costs. The four communities are connected only by a desire to work together, Chaninik president William Igkurak says.

“We are remote, separate, standalone utilities working together to help each other,” he says.

The group received money from the federal Department of Energy’s tribal energy fund and from other sources to install five wind turbines in each community, with a goal of displacing 200,000 gallons of diesel fuel each year. The turbines cost each community about $3 million.

But Igkurak says it’s not just a matter of getting grant funding and hiring someone to fly out and install the turbines.

“I’ve been watching other construction companies come to our community and bring their own people. We’re trying to reverse that trend,” he says.

The Wind Group has been working with Dennis Meiners at Anchorage-based Intelligent Energy Designs. He says about 14 wind technicians have been trained as the turbines are installed.

“Each community has (at least) a couple of very competent wind technicians now, who can handle just about anything on this machine,” Meiners says.

According to Meiners, the 95 kilowatt turbines were chosen because they’re durable and most repairs can be done by scaling a ladder affixed to the tower. That makes it easy for local technicians to repair. And they’re efficient—he expects each community to see a 30 percent to 40 percent reduction in the amount of fuel needed to generate power.

As part of the project, each community had upgrades to do at their local power plants. Kipnuk, where an outdated power plant was frequently failing, is getting a new power plant, Meiners says.

“They’ve had power rationing in the community for probably the last year. Over the wintertime they suffered many, many outages and it became a safety issue,” he said.

Meiners says the Wind Group installed turbines with more generating capacity than each community needs right now. The excess power will be routed to electro-thermal storage devices installed in some homes in the community and in a few community buildings. Residents with the storage devices in their homes can use the storage devices to heat their houses, paying a rate of about half the cost of heating with diesel.

The storage devices are part of a pilot program, which will help the Wind Group determine the best size and value for future storage devices, he says.

“You start to change the economy when the local utility can sell excess kilowatt hours to their customers … at a rate that is significantly less than what they are already paying to heat their house”, Meiners says. “The dollars stay in the community—they go to provide jobs—and it’s reduced the community’s dependence on diesel.” R

Rindi White is a writer living in Palmer.

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