Alaska utilities plan to invest $200 million in grid to boost renewable energy and increase reliability - Anchorage Daily News

Alaska utilities plan to invest $200 million in grid to boost renewable energy and increase reliability – Anchorage Daily News

Five Alaskan electric utilities will invest more than $200 million to upgrade the transportation system from Homer to Fairbanks, in a move they say could boost renewable energy opportunities in the state.

The improvements will allow more energy to flow along the decades-old transportation system along the Alaskan Railroad, said Curtis Thayer, president of the Alaska Energy Authority, a government agency involved in the project.

This will support more low-cost renewable energy projects on the horizon and allow energy to move more efficiently and reliably, benefiting price payers, he said.

Utilities involved in the project include the Chugach Electric Association in Anchorage, the Golden Valley Electric Association in Fairbanks and the Matanuska Electric Association for the Palmer-Wasilla region. From the Kenai Peninsula, it joins the Homer Electric and Seward Electric System Association.

Officials involved in the project describe the upgrades as historic, and say they will be part of some of the most significant improvements the network has ever seen, according to a prepared statement.

“For those of us who are looking into a renewable future, this gives us the opportunity to pump more energy from those sources into this pipeline and that’s going to be important to me,” Governor Mike Dunleavy said at the state’s Alaska Sustainable Energy Conference on Wednesday as the project was announced.

He said the planned improvements are part of a broader effort to lower energy prices across Alaska.

The proposal comes as utilities and the state begin to take a closer look at future energy sources amid concerns about the long-term availability and cost of natural gas from Cook Inlet, the dominant source of energy along the railroad belt.

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Also, the state is considering a potential significant addition to the state-owned Bradley Lake hydroelectric project near Homer, which is Alaska’s largest source of hydroelectric power, and the cheapest source of power on the grid. At the same time, private entities are seeking to use solar energy and Wind projects along the railroad belt.

Thayer said the transmission upgrades will support the integration of those projects into the system.

The five utilities will pay for the project by reallocating $12.5 million in annual payments owed to the state through 2050, Thayer said — part of an earlier agreement tied to the creation of the Bradley Lake project in 1991. Under the plan, the Energy Authority will issue bonds to raise cash for the project. .

He said the project would not cost price payers and would help limit price increases in the long run.

Thayer said the utilities and the energy authority began working together on the plan last year, and the upgrades would be beneficial immediately.

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The transmission system is too old to currently handle all of the energy produced at Bradley Lake. He explained that the lost savings amount to about $600,000 annually.

Arthur Miller, acting CEO of Chugach Electric, Alaska’s largest utility electric company, said in the statement.

Golden Valley Electric, located at the northern end of the grid, does most of its power from coal, but it has some of the highest rates in the railroad belt. CEO, John Burns, said the upgrades will benefit the Fairbanks facility with more access to renewable energy made elsewhere on the grid.

Burns described the upgrades as a “huge” move.

“These upgrades provide flexibility and increased energy capacity from Southcentral, including additional hydro and renewable energy sources, and will help (Golden Valley Electric) as we transition to cleaner energy sources in the future,” Burns said in the statement.

Specifically, the plans call for upgrading three old transmission lines on the Kenai Peninsula, and a battery storage system to help stabilize power fluctuations.

Jane Miller, CEO of Renewable IPP, which a few years ago built Alaska’s largest solar farm in Willow north of Anchorage, said the improvements will increase opportunities for companies like hers that sell renewable energy to utilities.

She said Renewable IPP plans to build two new solar farms that will produce several times more energy than the Willow project, in Houston at Matanuska-Susitna Borough and on the Kenai Peninsula.

She said the project would give companies like hers more flexibility in getting their power to any of Alaskans from Homer to Fairbanks.

Rather than being restricted to what the old transmission system can handle, she said, companies will be able to choose the most economical location for their project, reducing the cost of electricity, and benefiting consumers.

“It is encouraging to see the willingness of utilities and the state to go to more renewables,” she said.

Thayer said the upgrades would also support the new power that could come from the addition in the Bradley Lake project.

The Alaska Energy Authority is studying the potentially $500 million project known as Dixon Diversion.

Bradley Lake already provides about 10% of the power to the grid. Thayer said Dixon’s conversion would greatly increase this power.

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