Reducing Energy Costs in Alaska
The Alaska Energy Authority (AEA) hired Hatch Acres [Hatch Energy] to analyze various potential power generation and electricity transmission scenarios to meet growing demand within Southeast Alaska (SE Alaska) and adjacent regions. The project was managed from our Seattle office with team members also drawn from Oakville and Vancouver. Work included an investigation of external markets and market structures, assessment of proposed interconnections and generation developments in SE Alaska, and the preparation of estimates for the export line to British Columbia.
Geography
 The SE Alaska study area borders the west coast of British Columbia and consists primarily of mountainous coastal terrain and islands accessible only by boat or air. The population is approximately 30,000, with the largest communities being Kake, Petersburg, Wrangell, Ketchikan, Metlakatla and Craig. Most of SE Alaska is in the Tongass National Forest, USA's largest.
SE Alaska's electricity production, transmission, distribution and supply functions are divided amongst municipal utilities, cooperatives, private utilities and the Four Dam Pool Power Agency. There are 10 hydroelectric plants in the area with total installed capacity of approximately 70 MW, accounting in 2005 for nearly 95% of the region's power supply. Yet, most of these plants can supply only one or two of the load centers since there are limited transmission connections between load centers.
Challenges
The costs of transmission connections are typically quite high as a result of load-center location on a number of different islands, the mountainous terrain, climate and the risk of avalanches and landslides.
Installed hydro capacity, particularly at the Tyee Lake Hydroelectric Plant, cannot be fully utilized because of the lack of transmission connections to load centers. The lack of transmission infrastructure limits the ability to share reserve capacity and make optimal use of available water resources.
For communities such as Kake where there are no local hydro plants and no transmission connections, residents are fully dependent on expensive power generated locally in a diesel plant. This hampers economic growth.
Considering current oil prices and CO2 emissions, there is increasing interest in converting from oil to electric heating. In order to ensure that this does not cause more reliance on diesel generating plants, additional hydroelectric generating capacity is required.
Opportunities
Several potential sites have been identified for new hydroelectric plants in the 30-50 MW range. While these are generally too large for absorption in the SE Alaska system, neighboring British Columbia is expected to require significant amounts of additional power, partly to serve mining loads, and the Pacific Northwest is also seeking new power supplies.
Given the challenges described above, we focused on defining alternative hydroelectric plants and transmission lines in order to meet increasing domestic requirements as well as to tap export opportunities to British Columbia and/or the lower 48 states.
Key factors analyzed:
- Types of power products that could be sold in the export markets and the price trends for these
- Impacts of new government initiatives to mandate greater use of renewable energy and possible carbon tax measures
- Alternative business structures for required transmission lines to connect the new hydroelectric projects to the British Columbia border
- Capital and operating costs for required transmission lines to enable interconnection of SE Alaska communities, hydroelectric plants and the export transmission line
Analysis included a comprehensive review of historical data and our own past experience with capital and operating costs, as well as firm and average generation of various potential hydroelectric plant sites in the region.
We prepared load forecasts for the utilities in SE Alaska taking into account the potential conversions to electric heating and the additional load that could develop by expanding the area in which relatively low-priced hydroelectric power would be available.
A Regional Resource Planning Model was developed to analyze alternative development sequences and identify the least-cost approach to serve the SE Alaska market while maximizing the return from exports. The information developed using this model was also used to estimate greenhouse gas emissions that could be avoided if the identified transmission connections went ahead, allowing maximum use of hydroelectric resources to replace diesel generation and oil-based heating.
A process of partnership
 The project was carried out in close coordination with stakeholders through the AK-BC Intertie Steering Committee, Work Group and Technical Group coordinated by the Southeast Conference (a regional, non-profit corporation that advances the collective interests of the people, communities and businesses in SE Alaska. Members include municipalities, Native corporations and village councils, regional and local businesses, civic organizations and individuals from the region). A number of work sessions and presentations were carried out – all of which were open to the general public. All pertinent project information, including our draft reports, is available on the AEA web site.
We are now in the final stages of this interesting project and the Final Report will be completed in the near future.
For further information, please contact:
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Bob Griesbach
Nan Nalder