Legislature(2017 - 2018)CAPITOL 17

03/30/2017 10:15 AM ENERGY

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10:17:14 AM Start
10:17:32 AM Presentation: Energy Solutions for Alaska
11:49:17 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Energy Solutions for AK - TELECONFERENCED
Innovative Technology, Policy, & Economic
Development Strategies to Support our
Communities & Industries by Gwen Holdmann, AK
Center for Energy & Power (ACEP)
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                         March 30, 2017                                                                                         
                           10:17 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Adam Wool, Chair                                                                                                 
Representative Ivy Spohnholz, Vice Chair                                                                                        
Representative Matt Claman                                                                                                      
Representative Dean Westlake                                                                                                    
Representative DeLena Johnson                                                                                                   
Representative Jennifer Johnston                                                                                                
Representative George Rauscher                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: ENERGY SOLUTIONS FOR ALASKA                                                                                       
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
GWEN HOLDMANN, Director                                                                                                         
Alaska Center for Energy and Power                                                                                              
University of Alaska Fairbanks                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Presented a PowerPoint titled "Energy                                                                    
Solutions for Alaska."                                                                                                          
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:17:14 AM                                                                                                                   
                                                                                                                                
CHAIR  ADAM WOOL  called the  House Special  Committee on  Energy                                                             
meeting to order  at 10:17 a.m.   Representatives Wool, Rauscher,                                                               
Sphohnholz, Johnston,  Johnson, and Westlake were  present at the                                                               
call to order.  Representative  Claman arrived as the meeting was                                                               
in progress.                                                                                                                    
                                                                                                                                
^Presentation: Energy Solutions for Alaska                                                                                    
           Presentation: Energy Solutions for Alaska                                                                        
                                                                                                                                
10:17:32 AM                                                                                                                   
                                                                                                                                
CHAIR WOOL announced  that the only order of business  would be a                                                               
presentation by the Alaska Center for Energy and Power.                                                                         
                                                                                                                                
10:17:51 AM                                                                                                                   
                                                                                                                                
GWEN  HOLDMANN,  Director, Alaska  Center  for  Energy and  Power                                                               
(ACEP), University  of Alaska Fairbanks, shared  some information                                                               
on her  background as a  physicist and  engineer and her  work on                                                               
energy projects  in Alaska.   She directed attention to  slide 2,                                                               
"Alaska  Center for  Energy  and Power,and     reported that  the                                                               
program  began  nine years  ago  and  focused on  the  challenges                                                               
facing  Alaska.   She said  that  once a  particular problem  was                                                               
identified, then  a research team  was built, and  resources were                                                               
gathered to  address that  specific problem.   She  declared that                                                               
they  created information  for the  decision makers.   She  added                                                               
that  they  had also  worked  lot  with students  in  K  - 12  in                                                               
developing the  Alaska Energy Smart  curricula, a  popular energy                                                               
efficiency curriculum tailored to Alaska.                                                                                       
                                                                                                                                
MS. HOLDMANN  moved on to  slide 3, "Current and  recent research                                                               
in Alaska," and stated that the  focus was for energy programs in                                                               
which  the state  was interested,  including studies  directed by                                                               
the Alaska State Legislature.                                                                                                   
                                                                                                                                
MS.  HOLDMANN  shared  slide   4,  "Presentation  Overview,"  and                                                               
explained that she would discuss  three areas:  Energy technology                                                               
solutions,  supporting energy  policy, and  Alaska leadership  in                                                               
microgrid technologies.  She declared  that the energy policy had                                                               
a very important role in  any accomplishments in Alaska, pointing                                                               
out that Alaska had 10 percent of the world's microgrids.                                                                       
                                                                                                                                
CHAIR  WOOL  asked   if  there  was  any   concern  for  research                                                               
investment.                                                                                                                     
                                                                                                                                
MS. HOLDMANN  replied that,  as Alaska was  already a  leader, it                                                               
was  easier to  maintain momentum.   She  shared a  recent report                                                               
that the  Canadian government had  invested $400 million  into an                                                               
Arctic Energy fund, which would  stimulate activity for renewable                                                               
energy systems.   She declared  that it was important  for Alaska                                                               
to step up to stay at the cutting edge of technology.                                                                           
                                                                                                                                
REPRESENTATIVE JOHNSTON asked about energy storage.                                                                             
                                                                                                                                
MS. HOLDMANN  replied that energy  storage was  a "bit of  a holy                                                               
grail."   Low  cost energy  storage solutions  would allow  for a                                                               
real global paradigm shift for  the production and use of energy.                                                               
She said that this  had been a focus area for  a number of years,                                                               
and she offered  an example of thermal storage, as  it was a less                                                               
expensive and very  effective means for meeting  the energy needs                                                               
of a community, more so than the use of batteries.                                                                              
                                                                                                                                
10:26:21 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN discussed  slide 5,  "Energy Technology  Solutions:                                                               
Communities,"  and   reported  that   Alaska  had  a   very  high                                                               
discrepancy for  energy costs throughout  the state.   She shared                                                               
that the North  Slope had the lowest rates for  electric power in                                                               
the  state, as  the borough  had subsidized  the costs  for local                                                               
heat  and power  for many  years.   She pointed  out that  it was                                                               
important to  understand that subsidies and  energy pricing drove                                                               
the development of renewable energy systems.                                                                                    
                                                                                                                                
CHAIR WOOL  asked to  clarify that these  subsidies on  the North                                                               
Slope were not PCE (Power Cost Equalization).                                                                                   
                                                                                                                                
MS. HOLDMANN said that these  were subsidies provided through the                                                               
borough  and  were in  addition  to  the  state subsidies.    She                                                               
observed that the North Slope Borough  was the only region in the                                                               
state which had  not developed any renewable energy  system.  She                                                               
suggested that these  subsidies distorted the market  as they did                                                               
not  recognize  the  true  cost   of  energy,  but,  instead,  it                                                               
subsidized the status quo.                                                                                                      
                                                                                                                                
CHAIR WOOL  mentioned that  the committee  had discussed  PCE and                                                               
whether  it enhanced  or inhibited  the development  of alternate                                                               
energy.                                                                                                                         
                                                                                                                                
MS. HOLDMANN  said that the  PCE system was the  most transparent                                                               
and easy to  understand compared to those  in other jurisdictions                                                               
which  came through  multiple government  entities.   She  stated                                                               
that it was important to  understand who was actually benefitting                                                               
from a  switch to  an alternative  energy strategy,  otherwise it                                                               
was difficult to meet the goals of the project.                                                                                 
                                                                                                                                
REPRESENTATIVE JOHNSON asked about  ground heat technology and if                                                               
it was available all over Alaska.                                                                                               
                                                                                                                                
MS.  HOLDMANN explained  that  Juneau used  a  heat pump  system,                                                               
which  was first  installed as  a  seawater heat  pump system  in                                                               
Seward.   She reported that  these were very efficient,  and they                                                               
magnified  the value  of the  energy by  pulling energy  from the                                                               
environment.  She  said that the problem was they  were driven by                                                               
electric  power,  so  they  must be  in  areas  with  inexpensive                                                               
electric power.   She said that the ACEP had  done an analysis of                                                               
the performance  of that  system and  had subsequently  written a                                                               
guide to  heat pump systems  for cold  climates.  She  added that                                                               
Kotzebue was  reviewing air source  heat pump systems  to magnify                                                               
the value  of the energy.   She declared that these  systems were                                                               
not as beneficial in Interior Alaska.                                                                                           
                                                                                                                                
MS. HOLDMANN  pointed out that, as  most of the diesel  fuel used                                                               
in  Alaska was  imported  from outside  Alaska,  the pricing  was                                                               
driven by global markets and  this was additionally challenged by                                                               
the narrow window for shipping.   She stated that these were more                                                               
reasons for local energy sources.                                                                                               
                                                                                                                                
10:32:55 AM                                                                                                                   
                                                                                                                                
MS. HOLDMANN  shared the map  on slide 9, which  demonstrated the                                                               
magnitude  of the  challenge to  off grid  due to  remoteness and                                                               
incomplete infrastructure.   She reported that  there were almost                                                               
1.6 million people  sharing power and energy  resources who lived                                                               
north of the grid line.                                                                                                         
                                                                                                                                
CHAIR WOOL asked about for the definition for off grid.                                                                         
                                                                                                                                
MS. HOLDMANN  expressed her agreement  that there was  a struggle                                                               
with  terminology  and  explained  that her  definition  was  for                                                               
individuals and  communities who were disconnected  from the main                                                               
grid.  She added that the technical term was micro grids.                                                                       
                                                                                                                                
MS. HOLDMANN moved on to  slide 10, "ACEP Partnership with FNSB,"                                                               
and spoke  about the  partnership with  the Fairbanks  North Star                                                               
Borough [FNSB].  She said that,  as a portion of the ACEP funding                                                               
was designated  toward Alaska communities,  they were  working on                                                               
strategies which could be implemented  locally and be deployed in                                                               
the near term.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  JOHNSTON   asked  about  partnerships   with  the                                                               
military.                                                                                                                       
                                                                                                                                
MS.  HOLDMANN   replied  that  they   had  an   extensive  global                                                               
partnership with the Office of Naval Research.                                                                                  
                                                                                                                                
MS.  HOLDMANN  directed  attention  to slide  11,  "Volter  Pilot                                                               
Project at  Big Dipper."   She relayed  that, along  with solving                                                               
energy   problems,   driving   economic  development   was   very                                                               
important.   She spoke about  adapting technologies, as  they did                                                               
not believe  in re-inventing the  wheel, and she lauded  the work                                                               
with  biomass in  Finland.   She spoke  about a  Finnish designed                                                               
heat  and  power  biomass  system   which  could  work  well  for                                                               
Fairbanks and many other rural communities.                                                                                     
                                                                                                                                
REPRESENTATIVE JOHNSON asked if biomass could include coal.                                                                     
                                                                                                                                
MS. HOLDMANN  explained that  these were  wood chips,  which were                                                               
cheaper  to produce  than pellets  in smaller  communities.   She                                                               
reported that there  was a pellet mill in Fairbanks.   She stated                                                               
that this  system was not designed  to run on coal,  although the                                                               
gasification  process was  similar.   She reported  that the  new                                                               
combined  heat  and  power  plant on  the  University  of  Alaska                                                               
Fairbanks campus  was designed to  co-fire with up to  30 percent                                                               
of biomass.                                                                                                                     
                                                                                                                                
CHAIR WOOL asked about the air quality from this new technology.                                                                
                                                                                                                                
MS. HOLDMANN said  that this technology would not  result in high                                                               
level particulates,  and it was  an opportunity to  educate about                                                               
the differences for burning wood.                                                                                               
                                                                                                                                
MS.  HOLDMANN  spoke  about  slide   12,  "Energy  Solutions  for                                                               
Communities & Industry," and highlighted  that most microgrid and                                                               
distributed generation  technologies did not have  anything to do                                                               
with rural  and remote places.   She pointed out that  this was a                                                               
move  away  from  a centralized  generation  model  with  one-way                                                               
transmission  to the  end users,  toward a  two-way movement  and                                                               
flow  of electricity,  with  pockets of  small  generation.   She                                                               
declared  that  this was  the  new  paradigm for  electricity  in                                                               
modern  grids.    She  offered  her belief  that  Alaska  was  an                                                               
excellent  place  to  pilot technologies  and  strategies.    She                                                               
listed the components to include  firm generation, which included                                                               
hydro  power and  fossil  fuels;  intermittent generation,  which                                                               
included wind  power; energy  storage, which  included batteries,                                                               
fly wheels, and  thermal storage; and demand  response, which was                                                               
the ability to alter the power in response.                                                                                     
                                                                                                                                
10:43:52 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN  pointed  to  slides   13-14,  "ACEP  Power  System                                                               
Integration  Lab," which  depicted  the  laboratory, a  recreated                                                               
small microgrid at full power  level designed to mimic operations                                                               
in the not so perfect conditions of the real world.                                                                             
                                                                                                                                
CHAIR  WOOL   asked  if  intermittent  power   sources  could  be                                                               
mitigated with an efficient storage system.                                                                                     
                                                                                                                                
MS.  HOLDMANN acknowledged  that inexpensive  grid scale  storage                                                               
was  necessary,  although the  current  costs  were still  fairly                                                               
high.  She  shared some examples of battery  storage, including a                                                               
liquid metal  battery with  an unlimited  number of  cycles which                                                               
could be  done on a  small scale but not  yet on a  utility size.                                                               
She  returned attention  to slide  14 and  stated that  the goals                                                               
were to reduce  problems in the field, reduce the  cost of energy                                                               
to the  end users,  turn off the  diesels whenever  possible, and                                                               
train  system  operators.    She   explained  that  the  lab  was                                                               
contracted by private  sectors to test systems, and  then work on                                                               
integration packaging.  She added that  it was cost neutral.  She                                                               
moved  on  to  slide  15, "Raglan  Mine  Flywheel  Integration  &                                                               
Testing," and  explained that this  was a system they  had worked                                                               
on in the lab, as it  had never been integrated into a stationary                                                               
power application.   She said  that their  job was to  figure out                                                               
how  to connect  the  developer's  project to  the  grid, as  the                                                               
testing in the lab allowed  failures which were not acceptable in                                                               
the field.                                                                                                                      
                                                                                                                                
MS.  HOLDMANN  returned  to  slide   16,  "Analysis  of  Emerging                                                               
Technologies:   Storage."      She   said   that   many   battery                                                               
manufacturers  had "come  and gone."   She  reported that  Golden                                                               
Valley Electric  Association operated one of  the largest battery                                                               
systems in  the world,  which supported the  northern end  of the                                                               
Railbelt intertie.                                                                                                              
                                                                                                                                
CHAIR WOOL asked about the type of batteries.                                                                                   
                                                                                                                                
MS. HOLDMANN replied that these  were nickel cadmium, although it                                                               
was only  designed for potential outages,  as it was a  giant UPS                                                               
(uninterruptable power  supply) system.   She  spoke about  a few                                                               
battery  systems,  none   of  which  had  yet   succeeded.    She                                                               
emphasized that  they wanted  to get  things into  community use.                                                               
She clarified that they wanted the  failures to occur in the lab.                                                               
She shared  that the  lab was currently  working with  the Alaska                                                               
Village Electric Cooperative on a  small grid bridge system using                                                               
ultra capacitors.                                                                                                               
                                                                                                                                
10:53:21 AM                                                                                                                   
                                                                                                                                
MS.   HOLDMANN   shared   slide   17,   "Analysis   of   Emerging                                                               
Technologies: Nuclear,"  and reported  that the program  was also                                                               
interested in understanding  where the market was  going with new                                                               
technologies.   She  reported on  a nuclear  power program  study                                                               
which  the Alaska  State Legislature  had commissioned,  and APEC                                                               
had worked with ISER (Institute  of Social and Economic Research)                                                               
on the technical and economic  feasibilities.  She noted that, if                                                               
this existed,  there could  be potential,  and they  were keeping                                                               
track of the ongoing technology.                                                                                                
                                                                                                                                
MS.   HOLDMANN   shared   slide   18,   "Emerging   Technologies:                                                               
Hydrokinetics," and  spoke about hydrokinetics,  generating power                                                               
directly from  moving water, either  in a  river, a tide,  or any                                                               
current.   She reported  that there  was a  lot of  interest from                                                               
remote communities  with moving  water nearby.   She said  that a                                                               
full-scale test  site was maintained  in Nenana, and  she pointed                                                               
out that, as private investors and  not the state had invested in                                                               
many of these tests, many of these projects were not well known.                                                                
                                                                                                                                
REPRESENTATIVE RAUSCHER asked about tidal energy.                                                                               
                                                                                                                                
MS.  HOLDMANN replied  that this  was an  example that  investing                                                               
enough money  can make  anything possible; however,  as a  way to                                                               
reduce the cost of energy, tidal energy was not there just yet.                                                                 
                                                                                                                                
REPRESENTATIVE RAUSCHER  asked if  ACEP was still  exploring this                                                               
and were there any improvements to the process.                                                                                 
                                                                                                                                
MS. HOLDMANN  replied that currently  University of Alaska  had a                                                               
partnership with  the University  of Washington and  Oregon State                                                               
University  for the  operation of  the National  Marine Renewable                                                               
Energy Research  Center on  behalf of  the Department  of Energy.                                                               
She reported that  there was a major focus on  wave energy, tidal                                                               
energy, and in-river energy.  She  added that this had been under                                                               
consideration for Cook Inlet for quite some time.                                                                               
                                                                                                                                
REPRESENTATIVE RAUSCHER asked if this was viable yet.                                                                           
                                                                                                                                
MS. HOLDMANN replied that it was not yet economically viable.                                                                   
                                                                                                                                
REPRESENTATIVE JOHNSON pointed out that,  as rivers in Alaska did                                                               
not flow all year because  of cold temperature or ice, consistent                                                               
power would require multiple types of technology.                                                                               
                                                                                                                                
MS. HOLDMANN acknowledged that every  site in every community was                                                               
different, with different challenges.   She relayed that ACEP was                                                               
trying to remove  these barriers for industry  and communities to                                                               
deploy the various  systems.  She reported on  the development of                                                               
a  debris  diversion  system  to protect  the  turbines  and  its                                                               
testing and implementation.                                                                                                     
                                                                                                                                
11:03:23 AM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 11:03 a.m. to 11:10 a.m.                                                                     
                                                                                                                                
11:10:30 AM                                                                                                                   
                                                                                                                                
MS. HOLDMANN  offered her belief  that Alaska should  be thinking                                                               
about  what emerging  technologies made  sense for  the state  to                                                               
invest and  research versus what  would be adopted in  the future                                                               
should it be  developed elsewhere.  She stated  that the emerging                                                               
energy  technology grant  funds  were designed  to address  these                                                               
questions, and she  offered an example of  hydrokinetic energy as                                                               
Alaska had huge  resources.  She said that  small modular nuclear                                                               
reactors  and  energy  storage  also  had  potential  for  global                                                               
application, and  Alaska should  be aware  of what  was happening                                                               
with  these  technologies.   Although  Alaska  did not  have  the                                                               
funding and  resources for these  developments, the  state should                                                               
be part of figuring out how  to utilize these new paradigms.  She                                                               
pointed  out that  there were  92 utilities  in the  state, which                                                               
were good places to test new technologies.                                                                                      
                                                                                                                                
CHAIR WOOL reiterated  that the power systems of  the future were                                                               
less  centralized, and  that  the utilities  could  be viewed  as                                                               
microgrids.                                                                                                                     
                                                                                                                                
MS.  HOLDMANN  relayed that  there  were  already more  than  250                                                               
microgrids  at   many  different  levels,  and   that  some  were                                                               
interconnected.   She noted  that the  utilities in  the Railbelt                                                               
used to  be island kingdoms.   She  stressed that, as  there were                                                               
millions of  hours of operation  of these micro grids  in Alaska,                                                               
Alaska  could be  part of  the global  transitions in  the energy                                                               
market.                                                                                                                         
                                                                                                                                
MS. HOLDMANN addressed slide 19,  "IP Disclosures by ACEP in past                                                               
2 years" and said that ACEP  worked a lot with the private sector                                                               
for   developing  their   technologies,  as   well  as   in-house                                                               
development.   She offered  an example for  the development  of a                                                               
fuel meter which would show the amount of energy used.                                                                          
                                                                                                                                
MS. HOLDMANN discussed slide 20,  "Supporting Energy Policy," and                                                               
declared that this  was where substantive changes  could be made.                                                               
She  said  that  Alaska  energy policy  had  resulted  in  global                                                               
leadership  for  some  emerging energy  technology  areas.    She                                                               
offered an  example of  the Renewable Energy  grant fund  and the                                                               
Power Cost Equalization  program.  She spoke about  the ACEP work                                                               
with the RCA (Regulatory Commission  of Alaska) on the concept of                                                               
a Unified  System Operator for the  Railbelt grid, as well  as an                                                               
LNG market  analysis for the  coastal communities with AEA.   She                                                               
stated  that  there  was  an opportunity  to  "tweak"  the  Power                                                               
Project  Loan  Fund, an  excellent  fund  designed for  Alaskans,                                                               
which was also underfunded.                                                                                                     
                                                                                                                                
11:18:39 AM                                                                                                                   
                                                                                                                                
MS. HOLDMANN moved  on to slide 21, "Assessment of  a USO for the                                                               
Railbelt  Grid,"  and  explained  that  ACEP  provided  technical                                                               
assistance to the RCA and  gave a series of presentations looking                                                               
at  specific  challenges related  to  factors  for efficient  and                                                               
effective  transmission  of  electricity on  the  Railbelt  grid,                                                               
including  reliability,  cost,  and autonomy  for  the  different                                                               
utility entities.   ACEP  provided information  on what  had been                                                               
done elsewhere and what possible outcomes might occur.                                                                          
                                                                                                                                
REPRESENTATIVE  JOHNSTON   asked  about  the   policy  decisions,                                                               
whether the cost was an economic study or a technical study.                                                                    
                                                                                                                                
MS.  HOLDMANN explained  that they  used  relevant resources  and                                                               
that the economics and the technical aspects went hand in hand.                                                                 
                                                                                                                                
MS. HOLDMANN,  in response to Representative  Westlake, said that                                                               
ACEP  was not  always mentioned  in reporting,  as they  provided                                                               
technical  assistance   behind  the   scenes.    They   were  not                                                               
recommending policy,  but instead,  providing the  information to                                                               
support recommendations and policy.   She offered her belief that                                                               
it  was very  appropriate that  ACEP  was not  mentioned in  many                                                               
reports.                                                                                                                        
                                                                                                                                
CHAIR WOOL  relayed that  the House  Special Committee  on Energy                                                               
had been  more involved  on the  political side,  and not  on the                                                               
technical side.                                                                                                                 
                                                                                                                                
MS. HOLDMANN  said that  these were important  issues, as  it was                                                               
necessary  for the  utility industry  to function  as efficiently                                                               
and effectively  as possible.   She acknowledged that  there were                                                               
constraints and there was a  reality for the way things happened.                                                               
She  declared  that ACEP  was  a  technical resource,  with  some                                                               
understanding  for the  underlying  issues and  challenges.   She                                                               
stated  that  this  was  not  a  simple  problem  with  a  simple                                                               
solution.                                                                                                                       
                                                                                                                                
MS. HOLDMANN  directed attention  to slide  22, "AK  AES Project:                                                               
Barriers  to   Private  Investment,"  and  stated   that  private                                                               
investment was very important moving forward on energy projects.                                                                
                                                                                                                                
11:25:41 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN introduced  slide 23,  "Cordova ESS  (Specification                                                               
Driven Project),"  and spoke  about the  necessity to  change the                                                               
paradigm  so projects  would be  developed  around the  community                                                               
needs and  what the grid  could accept.   Once that  was resolved                                                               
the project could be  put out to bid to the  private market.  She                                                               
addressed  slide  24,  "Cordova Storage  Project  (Proposed),"  a                                                               
graph which reflected the daily and seasonal changes.                                                                           
                                                                                                                                
MS.  HOLDMANN, in  response to  Representative Claman,  said that                                                               
the blue  line was  the five-day demand  average, and  the orange                                                               
line was the  [power] generation, which was always  more than the                                                               
demand  in  case of  an  increase.    She  shared that  ACEP  had                                                               
proposed a battery system that  purchased power at night, when it                                                               
was  cheaper, and  then sold  the  services back  to the  utility                                                               
during  the day.    She pointed  out that  the  battery could  be                                                               
tapped if necessary,  which allowed for the use  of the generator                                                               
in case of demand to be kept at  a lower level.  She allowed that                                                               
this "spinning reserve" was the most important aspect.                                                                          
                                                                                                                                
REPRESENTATIVE JOHNSTON asked about  the economic benefit for the                                                               
"spinning reserve."                                                                                                             
                                                                                                                                
MS.  HOLDMANN pointed  out that  the asset,  which was  privately                                                               
owned, did not work in this  case because the value was mainly in                                                               
owning  the battery.   She  said that  in many  of these  smaller                                                               
projects, they  would incur these  challenges for  identifying an                                                               
interested private partner.                                                                                                     
                                                                                                                                
CHAIR WOOL asked  if the battery was a bridge  between the diesel                                                               
and  the hydro  in case  the demand  was high.   The  utility was                                                               
saving money by  not keeping the diesel running,  but the battery                                                               
was not selling a lot of power.                                                                                                 
                                                                                                                                
MS. HOLDMANN expressed her agreement,  and that understanding how                                                               
the  system was  being  used and  where the  value  was were  the                                                               
important issues in determining the correct model.                                                                              
                                                                                                                                
MS.  HOLDMANN  observed  that  there  was  a  place  for  private                                                               
ownership models  in Alaska.   She  declared that  the motivation                                                               
from a  private entity  for keeping an  asset running  was really                                                               
high, as  there was not  any payment  without the asset  being on                                                               
line.   She opined  that the customer  would not  necessarily pay                                                               
more money when a private investor was utilized.                                                                                
                                                                                                                                
REPRESENTATIVE  WESTLAKE  suggested  that   a  battery  pack  was                                                               
ancillary to the generation of renewable energy.                                                                                
                                                                                                                                
MS.  HOLDMANN   shared  slide  26,  "Alaska's   Renewable  Energy                                                               
System,"  which   depicted  the   70  renewable   energy  systems                                                               
statewide,  some   of  which  had  been   developed  through  the                                                               
Renewable Energy  Fund.  She stated  that Alaska was a  leader in                                                               
these   developments,  which   could   allow   for  new   revenue                                                               
opportunities and  jobs for Alaskans.   She projected  that there                                                               
would not  be a lot  of state  dollars available in  the upcoming                                                               
years and that it was important to use private sector models.                                                                   
                                                                                                                                
11:34:39 AM                                                                                                                   
                                                                                                                                
MS.  HOLDMANN  shared  slide  28,   "Iceland:  Global  leader  in                                                               
geothermal energy," mentioning that  she had worked in geothermal                                                               
industries  and  that  she was  an  Arctic  Initiative  Fulbright                                                               
Scholar and  had worked  in Iceland.   She reported  that Iceland                                                               
needed to  develop geothermal  as they  were importing  coal from                                                               
Europe.   This  had been  a politically  active decision  for the                                                               
transition  to  local energy  resources.    Now, 100  percent  of                                                               
electricity  and   heat  was   from  geothermal   and  hydropower                                                               
resources.   She reported that  Iceland had gained  an expertise,                                                               
learned how to do this right,  and had created an export industry                                                               
for geothermal energy knowledge.   She opined that this export of                                                               
knowledge was now about 7  percent of the gross domestic product.                                                               
She reported  that this knowledge  base allowed  for consultation                                                               
overseas when  there was  a lull  in projects  at home,  and this                                                               
kept the  industry employed.   She stated  that 3 percent  of the                                                               
GDP was  spent on research and  development, and there was  a lot                                                               
of   public  advocacy   for  geothermal   expertise,  slide   29,                                                               
"Iceland's Knowledge Export Industry."   She pointed to slide 30,                                                               
"Overseas activities of Icelandic  companies," which depicted the                                                               
worldwide geothermal energy projects  being worked on by Iceland.                                                               
She  moved  on to  slide  31,  "Iceland UNU  Geothermal  Training                                                               
Program,"  and  spoke  about  the   key  differences  from  small                                                               
investments.   She reported on  the careful selection  process to                                                               
bring  20   participants  annually  to  the   six-month  training                                                               
program,  where they  were  introduced to  the  industry.   Those                                                               
students, when they returned to  their home country, now had many                                                               
contacts in Iceland for partnership.                                                                                            
                                                                                                                                
MS. HOLDMANN  introduced slides  32 -  33, "ARENA:  Arctic Remote                                                               
Energy Networks," explaining that this  was a copy of the Iceland                                                               
program,  and that  Iceland was  a mentor  for developing  ARENA.                                                               
She said that ARENA currently  focused on the circumpolar Arctic,                                                               
gathering   and  sharing   knowledge  with   others  around   the                                                               
circumpolar Arctic,  and building connections and  bridges on the                                                               
practitioner level, instead of the  policy level.  She noted that                                                               
everyone had a specific project to move forward.                                                                                
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ  expressed  her  excitement  about  the                                                               
ARENA project,  and she asked if  the program was secure  and how                                                               
to ensure it would stay in place.                                                                                               
                                                                                                                                
MS. HOLDMANN shared  her concerns, noting that  it was originally                                                               
an  Alaska  based program.    She  stated  that  it was  an  ACEP                                                               
program,  and there  was no  federal  funding.   She offered  her                                                               
belief that this was a global  issue.  She reported that they met                                                               
every  other year,  and that  it would  continue if  ACEP wanted.                                                               
She acknowledged  that funding was  a substantive  challenge, and                                                               
that there was not a large budget for the program.                                                                              
                                                                                                                                
MS. HOLDMANN suggested a change in  the ARENA name from Arctic to                                                               
Alaska,  and she  reiterated  that  funding was  an  issue.   She                                                               
declared that  small investments  could go a  long way,  and that                                                               
the private sector could also invest.                                                                                           
                                                                                                                                
REPRESENTATIVE JOHNSTON  opined that Alaska  had not done  a good                                                               
job  of exporting  knowledge and  capability, and  that a  lot of                                                               
these had escaped the state.                                                                                                    
                                                                                                                                
CHAIR WOOL reiterated that Alaska  was becoming a leader in micro                                                               
grid technology and that it was important to maintain that edge.                                                                
                                                                                                                                
MS.  HOLDMANN said  that  this  was just  one  example for  where                                                               
Alaska was innovative  and been a leader.  She  closed with slide                                                               
34,  "Alaska  Center for  Energy  and  Power," stating  that  the                                                               
little stuff makes a big difference in these areas.                                                                             
                                                                                                                                
11:49:17 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 11:49 a.m.                                                                 

Document Name Date/Time Subjects
House Energy 3.30.17 - Gwen Holdmann, ACEP, UAF.pdf HENE 3/30/2017 10:15:00 AM