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Alaskans are facing a spike in electric and heating costs within a few years because of declining supplies of Cook Inlet gas.

It's a big challenge, but also an opportunity.

We have built big things in the past.

I know we can do so again in the future.

and it's just really a question of social and political will.

How realistic is a transition to renewables in Alaska, and is there political will to help make it happen?

We'll hear from renewable energy experts right now on Alaska Insight.

Good evening.

Tonight, in part two of our look at the future challenges of supplying energy to real built communities.

We'll discuss the potential for renewable sources to help replace natural gas as the main fuel for electricity and heating.

What's possible?

And what are the limitations?

Before we start that conversation, here are some of the top stories of the week from Alaska Public Media's collaborative statewide news network.

A Superior Court judge has ruled that Alaska's correspondence school allotment program violates a section of the Alaska Constitution.

The program reimburses parents for up to $4,500 per year for books, supplies, activities, and even private school classes.

But Judge Adolf Zeman found last week that the system violates the clause of the state constitution that prohibits the use of public money for, quote, for the direct benefit of any religious or other private education institution.

Zeman went on to write that he found no way to narrow the law enough to just exclude payments to private or religious schools, and so he overturned the entire law.

Governor Mike Dunleavy and Attorney General Treg Taylor both expressed disappointment with the ruling and said they're seeking a stay and an appeal.

The US Army Corps of Engineers has upheld its denial of a permit for the proposed Pebble Mine, upstream from Bristol Bay.

The decision, issued on Monday, is the latest in a long string of legal and administrative rulings against the project.

Over a year ago, the Environmental Protection Agency issued a final determination that a mine in the area would damage or destroy miles of salmon streams and more than 2000 acres of wetlands.

The corps cited that decision in upholding their denial.

Pebble Vice President Mike wall says the company's main focus right now is on a lawsuit seeking to overturn the EPA's decision.

While opponents of the mine say they're still seeking federal legislation to permanently block it, Diamond High School graduate Alissa Pili is the sixth Alaskan to become a player in the Women's National Basketball Association.

Pili was drafted eighth overall by the Minnesota Lynx on Monday, and now shares a record with Ruthy Heberd of Fairbanks as the highest overall draft pick of an Alaskan.

Pili previously played for the University of Southern California, as well as the University of Utah, where she starred as the team's leading scorer in 2023.

While playing for Utah.

Pili won the Most Outstanding Player award at the Great Alaska Shootout.

Pilis season with the Lynx will begin in under a month.

When the Lynx tip off in Seattle against the Seattle Storm on May 14th.

You can find the full version of these and many more stories on our website.

Alaska public.org or download the Alaska Public Media app on your phone now on to our discussion for this evening.

The energy crunch facing not just South Central residents, because the price of railbelt energy affects the economy and the rate for rural energy subsidies through the Power Cost Equalization Fund.

The looming shortage of cooking gas and the anticipated spike in energy related expense affects the entire state.

What are the possible solutions?

Some lawmakers are calling for more gas development.

Currently, two thirds of the electricity on the rail belt is generated from Cook Inlet natural gas.

But with a gas shortfall looming, utilities are scrambling to develop new plans to continue producing electricity, including boosting renewable energy.

Alaska Public Media's Kavitha George reports on what is possible.

The five major electric utilities serving Alaska's rail belt are racing to come up with new energy sources.

As officials worry, Alaskans electric bills and home heating expenses could spike.

A recent federal study says the cheapest option is to aggressively build out renewable energy, like solar and wind.

That would also be more in line with global climate targets to cut greenhouse gas emissions.

University of Alaska Fairbanks energy historian Philip White says the more renewables we can build, the less will have to rely on expensive natural gas imports.

If we can deploy as many dual bowls as possible or other fuel saving technologies like solar wind storage, I think we can really extend the timeline in which we have, you know, that the existing natural gas resources can service.

So how quickly could Alaska build out renewables?

Currently, about 15% of real belt electricity comes from renewable sources, mostly hydropower.

The federal study found in the most affordable option, renewables would provide 76% of electricity generation by 2040.

That would require building major new wind and solar farms, along with battery storage.

Wind power, for example, would go from providing just 2% of real electricity today to 51% within 15 years.

Chugiak Electric Association, the rail belt's largest electric utility serving Southcentral, is pursuing major wind and solar projects.

Chugach CEO Arthur Miller says the utility is working to diversify its energy sources, but Alaskans are likely in for a few years of high electric bills.

I think there's no question that, electric rates will increase, as a result of this.

We're still evaluating what the impacts will be.

White says the energy transition will require major changes in how utilities do business.

The biggest hurdle, he says, is establishing better coordination between the five utilities.

If the wind isn't blowing in Fairbanks, but the sun is shining in Anchorage, it's important to easily send power from one part of the grid to another.

Utilities would also have to build a lot of big projects really quickly.

White says it's a huge challenge, but he's hopeful.

We have built big things in the past.

I know we can do so again in the future.

and it's just really a question of social and political will and coming together to agree that we have big challenges to solve.

This session, there are proposals in the state legislature to push utilities to develop renewables more quickly.

Reporting in Anchorage.

I'm Kavitha George.

Last week on Alaska Insight, we delve into the natural gas supply problem to better understand why there is a looming shortage of cooking gas, possibly as soon as 2027.

Tonight we're talking about the role renewable energy might play.

Joining me tonight to discuss what they see as the best path forward for the future of energy generation and affordability in Alaska is Chris Rose.

Chris is the founder and executive director of Renewable Energy Alaska Project, or Reap.

And Jen Miller is the CEO and co-founder of Renewable Independent Power Producers.

Welcome, both of you.

Thank you.

Thanks very.

So, Chris, you were on Talk of Alaska with us recently, as was John Sims, the president of ENSTAR Natural Gas.

You said every month we delay taking action, we get closer to higher prices.

What do you think that means for cost increases?

And how quickly do you think we can increase the amount of renewable energy for the rail belt that's currently at 15%.

What are the options here?

Well, currently, about two thirds of the gas and cooking oil is used for heating.

About a third is used for electricity generation.

And we have much more opportunity to displace that one third for electricity generation.

And that's what we're here to talk about with renewable electricity.

Although there are many countries and places around the world that are using renewable electricity for heating and transportation, that is a that's step two.

Right now we're just trying to displace the natural gas that the Department of Natural Resources, Division of Oil and Gas has been saying consistently for 15 years.

We would begin to have a shortfall of in 2027.

So we have a small market.

There's not a lot of people who want to finance exploration on a Cook Inlet to sell gas, and only 500,000 people.

So we're having difficulty in supplying the gas that we need when solar can come in pretty quickly, 4 to 6 years for a brand new project from the beginning to actual commissioning.

But there are several projects that are in phase already that could be coming on as soon as 2027, 2028, and those could have a significant dent on the amount of gas that we could displace and use that then for heating.

John Simmons, the president of NStar Natural Gas, said there is no market based solution that's going to reduce the cost of energy to consumers.

Do you see it that way or no market based solution, or is this just if you're considering gas?

Well, we don't have a market for electricity here.

We have four monopolies.

We don't really have a market for heating either.

We have one monopoly.

So when we talk about market based solutions, we're not necessarily going to be talking about the monopolies that are currently supplying either heat or electricity.

We do have a market potential for independent power producers who can compete against each other to bring the best projects to the utilities and then pass on those costs to the consumer.

So one of the reasons that we are promoting a standard in the legislature, a renewable portfolio standard like 29 states have, is that create investment certainty for independent power producers and their financiers to come to Alaska, a small market, and to establish competition among themselves, to develop renewable energy projects for consumers.

Okay.

And you mentioned independent power producers.

Enter independent power producer Jen.

Your back story is so interesting.

You're an engineer and worked in the oil industry, as are your business partners.

You founded your company in 2017 after installing solar panels on your own homes.

How did that lead you to decide to start a company to produce utility scale solar?

And what does it take to get to that utility scale?

Yeah.

Thanks, Laurie.

So yes, my business partners and I, in the same summer independently decided to put solar on our rooftops.

And we're we're both we're all passionate about renewable energy, but we're also really passionate about economics, which is good for utility members.

And so anyways, as we were doing those projects and we did, we said, okay, we can make these economic if we do it ourselves.

And so we did our own design, did our own install.

And when we did the install, particularly compared to the oil and gas industry, from as far as energy generation goes, like, oh my gosh, this technology is so simple.

No moving parts, non-hazardous, easy to install.

And we also have backgrounds in project management and it's a lot easier to do one project really well rather than to do 100 small projects.

And so we said, okay, we you know, one, we think renewable energy is very economic and could have a positive effect on energy prices for Alaskans.

And the best way to do that, given a small team, is to focus on large projects and doing one at a time initially at least.

And so yeah, so we got started with our first pilot project, with, in 2018.

And and really it was all about proving up the technology because when we started in 2017, everyone said solar in Alaska, that can't work.

You know, it's just as a mental model or mental disconnect.

And, but after doing the pilot, we saw that our costs came in on budget and closed to lower 48 prices, and that our production and operating costs were as predicted.

And so the economics worked.

And that's really what the future of renewables and energy generation is all about in Alaska is we have to be cost competitive.

We have to.

What we found is solar.

and, you know, other companies are finding that wind and other technologies can compete with the cost at current cost and generation, and we can help suppress energy prices.

And so it's not just that, oh, we feel good about doing a green thing.

We're also doing the economic thing that's good for Alaskans and keeps energy prices down.

That's such an important point too, that it's not just about the emotional connection, that it's really makes economic sense.

In your first project that finished in 2019, you self-funded, 140 kilowatt pilot, about 400 panels.

You expanded it, installing more than 3000 panels.

Tell us about the time involved and what that system can now generate.

How much power is coming from that.

So right now yeah.

So going from our first 140 kilowatt pilots, again, that was 408 panels to then go into a 1.2MW expansion.

And these are all very small projects compared to lower 48 standards.

but what's interesting is even that really small scale system within the feeder, the distribution feeder that it supplies in the Willow area, we made about 10% of energy production.

And then we've also done, most recently an 8.5MW solar farm, which is 14,400 panels.

And we know these numbers really well because one of the core values of our company is to be very hands on in the construction.

And that's how we learn what works, what doesn't work.

How can we improve.

And so all these numbers are committed to memory because we're we're part of intimately involved in the install.

but looking at that Houston solar farm, there's times where it's over 50% of the supply within that feeder, to the the big Lake Houston area.

And so we're starting to get to a point where we're becoming significant, even in those smaller distribution systems.

And, looking forward towards growing more now that both the utility and, renewable IPP have experienced in the operations phase.

And because you're building larger scale systems now, you had to get approval from the regulatory, Commission of Alaska, the RCA.

What was that process like?

Are they fairly well versed in dealing with independent power producers?

They are.

The Regulatory Commission has been great to work with and and likewise for utilities.

And I think what's been new for independent power producers is especially with the drop in cost of solar technology, it now it's an easy case to make.

And so the regulatory Commission's job is they're looking out for consumers to say this is a fair contract.

You're not falsely falsely driving up prices.

It has to make good sense for the consumer.

And so as long as you're going forward with a contract that proves that it is a cost competitive form of generation, then they say, hey, this is great, bring me more projects like it.

And the key though is, I think the challenge for companies is you really have to be on top of your game and, you know, watch and control your costs so that because it's all about that upfront capital costs, because, solar farm, the panels are warranted for 30 years, which is just kind of wild to think about.

but if you don't control that upfront cost, then the, you know, your project economics, you know, more to.

Yeah, exactly.

And you're in because you're taking independent power producers take the upfront risk on the project.

And so you agree a contract ahead of time on a $1 per kilowatt hour with the utility.

And so that's locked in.

And so the revenue stream is what it is important to keep costs in check.

Exactly.

And so it's it's a good mix because the, private company is incentivized to bring the project in on budget.

and the consumer is protected from risk.

Yeah.

Sounds like a great partnership forward.

Chris, back to the current concern with Cook Inlet Gas Supplies.

You want Alaska to avoid a long term LNG contract.

Talk about why and what you think is reasonable for bringing in outside gas for the midterm, because it sounds like there's not going to be any way to avoid that at this point.

I think all the utilities, including N star and the electric utilities, are making plans to import LNG, probably from another country.

So not only this is energy independence and energy security issue for our state, but there's a lot of volatility involved with, natural gas prices.

the nice thing about renewables that Jen was just talking about is they're stably priced.

Once a fixed contract is agreed to between the utilities and an infinite power producer, that price doesn't change over time unless the contract says it's going to escalate.

It doesn't escalate because of fuel prices.

What the National Renewable Energy Laboratory that was referenced in the intro found is that because the price of natural gas is going to spike so much when we start to import, we will actually save $1.3 billion over the course of the next 16 years.

If we start moving aggressively to renewables, primarily wind and solar, and those projects are going to rely in part on the federal production tax credit.

Now we can get 40% or investment tax credit.

We can get up to 40% of the cost of those projects paid for.

However, those tax credits expire in 2032.

So if we lock into a long term contract, we could easily see ourselves frozen in place and not being able to transition and take advantage of this 40% off sale.

Basically, the federal government's having to promote renewables across the country.

Jen, you're working on projects from Kenai to Fairbanks.

Describe what's on the horizon for your company, the timeline, and what you will ultimately generate from the projects that are getting built right now.

Yeah.

So, right now, you know, we have about ten megawatts of solar in operation, and our pipeline is, you know, easily over, you know, 100 or hundreds of megawatts.

And so solar projects take about 3 to 4 years to work through the development phase.

And that's why we need land for the project.

Doing great and technical studies to show how it integrates into the grid and then working that long term, what's called the power purchase agreement to sell electricity to the utility and then bringing in private financing, to fund the project ultimately.

And so that process does take does take time and we have projects, right now that we've been in progress on for over three years.

And so they are certain to near that point where we could be closing and hopefully moving into construction.

And, yeah.

So right now, the near-term pipeline is probably, you know, is between 100 and 200MW.

but that's looking probably five years out.

And that's what we've been able to develop just with our limited resource but resources of the company.

But with our successful completion of the Houston Solar Farm project, and really our company getting on our feet is a, you know, we're through that first five year startup phase, painful phase where you're almost seven years old.

And so as we bring in more employees, we're going to be able to scale our development pipeline much larger.

and then the other key, too, is as the utilities are getting more and more sophisticated with integrating renewable energy, that was going to be my next question is how is how is the transition system?

How receptive is it to these various sources coming online?

So one thing that's key is so we have a transmission system, which is kind of our highway or freeway for electrons all the way from from Homer to Fairbanks.

And when it, when we're looking at renewable energy generation and it's usually distributed out and what we want to do is we want to site those projects in the best possible location where the wind is highest or where the it's, you know, at least cloudy weather, you know, far away from the coast if we can.

and so by doing that, we can maximize the production, lower the cost of the energy.

And in the transmission system is really that backbone that allows us to move those electrons from where they're generated to where consumers are.

And so our grid is an older grid.

It doesn't have a lot of redundancy.

And so but we did the state did recently receive a $200 million, matching grant from the federal government to upgrade sections of that transmission system.

And then the other key thing is deploying battery storage, because as renewables, you know, we can't control that.

It's non dispatchable power.

And so when a cloud comes over when the wind dies off we drop out.

And when you and when you look at grid stability it's in the millisecond.

And we need something that can dispatch and firm up that power supply very quickly.

But luckily batteries battery storage is a great technology for that.

And so going forward we're going to see a lot more deployment of battery storage.

And the utilities are very much getting on top of doing batteries, but doing it in a way where they can get federal funding and take advantage of these kind of once in a lifetime opportunity so that Alaskans don't have to foot the bill for all of it.

Well, talking about solar, but, Chris, what are some of the other projects that you're seeing that have potential to also help out here that are other forms of renewable?

In the short term, there's a lot of wind projects that can make a big difference.

And in fact, I think right now there are almost 4 or 500MW of potential wind projects that are being looked at by the utilities, and any of those projects could get developed and built here in the next 3 or 4 years.

Considering the fact that we've got a small grid, if you add up all four of the co-ops from Homer to Fairbanks, their average annual aggregate load is like half of a power plant in the lower 48.

So we have four utilities essentially running half of a power plant.

So for us to be able to displace large percentages of our gas generated power is in that us.

And in that sense, not that hard to do.

This is not California with 40 million people.

And we're trying to get to 75% renewable with that kind of population would be a completely different exercise.

But between the solar projects that Jen and other developers are looking at, the wind projects that people are looking at, we could quickly get to 40 or 50% renewable just in the next 4 or 5 years, and then we would start to see a significant ability to move up closer to 70 to 75% just in another ten years.

So it's real, real possible geothermal on the grid, potentially down the line.

There are at least 100MW of small hydro projects that could be developed that are under a megawatt.

Each.

They don't have huge development risk, but could actually add to the renewable power that the grid could use.

There are multiple different renewable energy resources.

We have, and this is really a competitiveness thing.

The rest of the world is doing this, and Denmark is already getting 49% of all their electricity from wind.

There are multiple countries getting 20% of their wind electricity from wind and 15% of their electricity from solar.

Those are stably priced economies.

If we continue to rely on volatility as fuels, it's going to be very difficult for Alaskans to compete in the world market.

You've laid out, an optimistic timeline for bringing more renewable energy online in within the next five years or so, what is needed from lawmakers and the governor to help make that happen?

Well, I mentioned the portfolio standard.

I think that would bring in even more competition and bring that investment certainty to the developers and the financiers.

It also gives the utilities regulatory certain that they certainty that they need to sign these contracts with the IPPs, and also to make investments in their own utility, to make sure that they can integrate these renewables, because they're going to have to hire new people, get new software, do training, the kinds of things that they'll they'll cost some money upfront, but we'll be able to allow them to integrate it a lot more renewables.

So that's important.

The other thing that's important that the state's not addressing yet and utilities have not addressed, but I think everyone agrees we need to get to is dispatching all of these different projects with one system operator.

That is a way more efficient way to run a grid than to have four separate utilities, dispatching their own supply and demand in the smaller service area.

All right, so leave it there.

I'm sorry, and I'd love to continue this conversation.

We'll have you come back.

Maybe in the fall and see how things are going.

Let's play.

Thank you.

Big decisions regarding the best options for.

steady, affordable supply of energy for rail customers must be made soon.

Ultimately, how much of the energy comes from renewable sources remains to be seen.

As you heard this evening, cleaner energy generation is already happening and will be an increasing part of the overall mix for Alaskans in coming years.

That's it for this edition of Alaska Insight, visit our website Alaska public.org for breaking news and reports from our partner stations across the state.

While you're there, sign up for our free daily digest so you won't miss any of Alaska's top stories of the day.

Thanks for joining us this evening.

I'm Laurie Townsend.

Good night.