Improving Rural Energy Systems Could Be Key To Attracting Energy Investors As State Funds Diminish

Feb 28, 2017

An AVEC tower, installed in December 2015, stands south of the Bethel landfill, collecting meteorological data AVEC will use to replace the tower with a wind turbine.
Credit Dean Swope / KYUK

Unless people make changes, the rising cost of electricity and heat will only make life tougher in rural Alaska. Right now Power Cost Equalization, or PCE, subsidizes energy costs in rural Alaska. While that program is safe this year, it probably will not remain so in the future as the state seeks to make do with smaller budgets.

Tight money means that building alternative energy systems in rural Alaska is also going to be tougher. Chris Rose, head of the Renewable Energy Alaska Project, says the era of grants totally funding big projects like wind turbines is over. Village utilities need to look at financing these projects with private investors, and that means making their existing systems work better to attract that investment.

"An investor questioning about financing a project is going to be, ‘How is this going to operated and maintained? How is my investment going to be taken care of?'" said Rose. “So we see the whole issue of human capacity and workforce development is central to having the financing that we are going to need to build new projects."             

Rose is hopeful. He says Alaska is the leader globally in developing wind/diesel utility systems. The state has learned a lot, and many third world countries hope to learn from us. He points to the Chaninik Wind Group representing Kwigillingok, Kongiganak, Kipnuk, Tuntutuliak, and Chefornak on the Yukon Kuskokwim Delta as an example of taking the lead.

"All of those communities are working together. Some of them already have wind and energy storage; others are looking to put it in,” said Rose. “And they are really doing a good job of understanding what they need to maintain these systems and helping each other, and I think they understand that it's a long term proposition."

Before its money ran out, the State's Renewable Energy Fund laid out $250 million, much of it for the installation of new wind turbines in rural Alaska. Rose says more remains to be done, especially in the windy Yukon Kuskokwim Delta.

"Of the 200 or so communities that are not connected to a grid, about 70 now have some sort of renewable energy on top of diesel. About 60 or so were paid for, in part or all, by the Renewable Energy Fund. So there are still a good hundred communities - and many of them are out in the YK Delta - that still don't have wind," said Rose.

Building a wind turbine is just the beginning. It has to be operated, maintained, and optimized to get the most out of it. The goal, Rose says, is to produce half of the electricity every year from wind, but few systems in Alaska are doing that; performance varies widely.

"If you've got one system that's displacing 10 percent of the diesel they thought they were going to, and another one that's displacing 90 percent, well obviously there's a huge range there,” said Rose. “What we want to do is figure out what is causing those differences."

The Alaska Village Electric Co-operative (AVEC), which now owns the Bethel electric utility, is interested in getting more wind onto the Bethel grid. With AVEC wind turbines in town, Bethel could become a center for training and could offer help to surrounding villages that already have wind generators.

But the biggest savings in energy comes from not using it to begin with. In a building, that can mean something as simple as conducting an energy audit, changing behavior, replacing old equipment, filling in cracks, and operating the existing systems better.

An example of what these types of changes can accomplish took place at the building which houses the offices of the Yukon Kuskokwim Health Corporation. After the fixes recommended by the audit, the fuel vendor arriving on schedule to fill up the tank was shocked to discover it was still half full, according to information from a panel at the Alaska Energy Forum this month.

Wasting energy is not just a problem in the bush. The amount of energy lost statewide is huge. The problem is that no one has concrete numbers on the state's total energy consumption. The best estimate, according to Rose, is that $5 billion annually is being spent on energy to heat and power buildings and for transportation. The estimate is that 20 percent of that is being wasted.

"It's like having an annual billion dollar bonfire where people just stand around and throw bills into a fire,” said Rose. “We're literally not getting any benefit out of that billion dollars worth of energy, because it's being used inefficiently."

Energy in homes, utilities, and communities will be the subject of a workshop in Bethel hosted by the Calista Corporation later this spring. The workshop will cover everything from how to reduce energy costs in buildings, working together to produce energy more efficiently, operating and maintaining renewable systems, setting rates, and finding financing.