Legislature(2013 - 2014)BUTROVICH 205

02/14/2013 07:30 AM Senate SENATE SPECIAL COMM ON IN-STATE ENERGY


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07:30:17 AM Start
07:31:03 AM Overview: University of Alaska Fairbanks, Alaska Center for Energy and Power
08:33:46 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ UAF Alaska Center for Energy and Power Overview TELECONFERENCED
Director Gwen Holdmann
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE SPECIAL COMMITTEE ON IN-STATE ENERGY                                                                         
                       February 14, 2013                                                                                        
                           7:30 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Click Bishop, Co-Chair                                                                                                  
Senator John Coghill, Co-Chair                                                                                                  
Senator Peter Micciche                                                                                                          
Senator Dennis Egan                                                                                                             
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Senator Charlie Huggins                                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW: UNIVERSITY OF ALASKA FAIRBANKS~ ALASKA CENTER FOR                                                                     
ENERGY AND POWER                                                                                                                
                                                                                                                                
     - 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: Provided an overview of the Alaska Center                                                                 
for Energy and Power.                                                                                                           
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
7:30:17 AM                                                                                                                    
CO-CHAIR CLICK BISHOP called the Senate Special Committee on In-                                                              
State Energy meeting to order at 7:30 a.m. Present at the call                                                                  
to  order were  Senators Micciche,  Egan, Wielechowski,  Co-Chair                                                               
Coghill and Co-Chair Bishop.                                                                                                    
                                                                                                                                
                                                                                                                                
^OVERVIEW:  University of  Alaska  Fairbanks,  Alaska Center  for                                                               
Energy and Power                                                                                                                
OVERVIEW:  University  of  Alaska Fairbanks,  Alaska  Center  for                                                           
Energy and Power                                                                                                            
                                                                                                                              
7:31:03 AM                                                                                                                    
CO-CHAIR BISHOP announced that the  business before the committee                                                               
would be an  overview by Gwen Holdmann for the  Alaska Center for                                                               
Energy and Power (ACEP).                                                                                                        
                                                                                                                                
7:31:39 AM                                                                                                                    
GWEN  HOLDMANN, Director,  Alaska  Center for  Energy and  Power,                                                               
University of  Alaska Fairbanks (UAF),  stated that  the In-State                                                               
Energy  Committee  had worked  on  some  serious issues  for  the                                                               
state. She  noted that various  ACEP projects were  very relevant                                                               
to  some  of the  issues  that  were  before the  committee.  She                                                               
disclosed  that ACEP  projects addressed  current and  long range                                                               
opportunities, some extending 10 to 50 years into the future.                                                                   
                                                                                                                                
MS.  HOLDMANN  called  attention   to  Alaska's  energy  use  and                                                               
explained the  following as  to what  the state  was on  track to                                                               
spend if it did nothing:                                                                                                        
                                                                                                                                
   · $5 billion on diesel fuel in rural Alaska.                                                                                 
   · $60 billion on fossil fuels for Railbelt electric power                                                                    
     generation.                                                                                                                
                                                                                                                                
She  noted  that  Alaska's total  energy  related  appropriations                                                               
since  2008 was  $2.3  billion for  the  Power Cost  Equalization                                                               
(PCE)  program,  Renewable  Energy   (RE)  Fund,  Alaska  Housing                                                               
Finance  Corporation (AHFC)  programs, pipeline  initiatives, and                                                               
the Susitna-Watana Hydroelectric Project.                                                                                       
                                                                                                                                
SENATOR MICCICHE  asked what  the timeline was  for the  state to                                                               
spend $5 billion on diesel and $60 billion on fossil fuels.                                                                     
                                                                                                                                
MS. HOLDMANN answered  that the energy use data was  based upon a                                                               
20 year horizon.                                                                                                                
                                                                                                                                
She said Alaska's energy challenges were as follows:                                                                            
                                                                                                                                
  · High energy costs, an issue from many parts of the state.                                                                   
   · Fragmented electric grid, the state was disconnected to                                                                    
     other electric grids and that posed different challenges as                                                                
     opposed to the Lower 48.                                                                                                   
   · Harsh    climate,   the    negative   effects    on   energy                                                               
     infrastructure.                                                                                                            
   · End of supply lines.                                                                                                       
   · Stranded resources, the state had fantastic fossil and                                                                     
     renewable resources, but a lot were stranded.                                                                              
   · Dispersed population.                                                                                                      
                                                                                                                                
7:34:59 AM                                                                                                                    
MS. HOLDMANN  addressed her  role with  ACEP. She  explained that                                                               
she came from  the private sector as a project  developer and had                                                               
been involved in  building projects in the past.  She stated that                                                               
there  was a  real  role for  the University  of  Alaska (UA)  in                                                               
working  with  industry,  communities,  and  the  legislature  in                                                               
trying to  figure out how  to move  forward. She said  there were                                                               
three main ways that UA could play a role as follows:                                                                           
                                                                                                                                
   · Developing information for decision makers by providing:                                                                   
     information   on   technology  testing   and   optimization;                                                               
     industry   information  on   technologies  that   were  most                                                               
     appropriate for the Alaska  environment; and energy analysis                                                               
     to support policy makers.                                                                                                  
   · Preparing students to work in energy related disciplines to                                                                
     provide education opportunities and to work closely with                                                                   
     Alaska industry for energy related jobs.                                                                                   
   · Commercializing energy innovation to assist businesses in                                                                  
     industry wide challenges.                                                                                                  
                                                                                                                                
She noted an  example of an industry  challenge for hydrokinetics                                                               
due  to  debris.  She  said   debris  was  a  problem  for  every                                                               
hydrokinetic manufacturer with interest  in Alaska. She explained                                                               
that ACEP had  developed a debris diversion system  and tested it                                                               
last  summer in  Nenana.  She  stated that  the  Nenana test  was                                                               
successful  and  energy  related developments  with  the  private                                                               
sector could also be used outside of Alaska.                                                                                    
                                                                                                                                
7:37:57 AM                                                                                                                    
CO-CHAIR  BISHOP  asked  for  additional  information  on  ACEP's                                                               
debris diversion system.                                                                                                        
                                                                                                                                
MS. HOLDMANN stated that ACEP  was doing "real stuff" rather than                                                               
just  completing  studies. She  said  ACEP  subjected the  Nenana                                                               
debris  diversion  system  to breakage-test  conditions  and  the                                                               
system  responded well.  She  divulged that  ACEP  was seeking  a                                                               
patent for the debris diversion  system due to its unique active-                                                               
design.  She  remarked how  excited  the  industry partners  were                                                               
after seeing the debris diversion system work in Nenana.                                                                        
                                                                                                                                
MS.  HOLDMANN explained  that  ACEP  was doing  their  work on  a                                                               
minimal budget  and noted their  [FY13 Capital  Improvement Plan]                                                               
(CIP)  request   for  support   to  continue   commercial  energy                                                               
innovation projects.                                                                                                            
                                                                                                                                
SENATOR MICCICHE stated that Alaska  had pieces but not an actual                                                               
statewide  energy plan  and explained  that a  good baseline  was                                                               
missing. He  asked if a  study were  funded, would ACEP  have the                                                               
capacity  to   divide  the  state  into   logical  segments  that                                                               
specified the available sources.                                                                                                
                                                                                                                                
MS. HOLDMANN answered  yes. She said ACEP had  been doing exactly                                                               
the kind of work Senator  Micciche noted. She explained that ACEP                                                               
worked closely  with the  Alaska Energy  Authority (AEA)  and the                                                               
Alaska Division of Geological &  Geophysical Surveys (ADGGS). She                                                               
noted that  ACEP had  been working with  ADGGS on  geothermal and                                                               
coal resource options.                                                                                                          
                                                                                                                                
7:40:41 AM                                                                                                                    
She explained that  ACEP was building research teams  at UAF. She                                                               
noted that UAF had a  wealth of existing knowledge and expertise.                                                               
She  said there  was no  need for  ACEP to  hire new  people; the                                                               
objective was to  take advantage of the people  that were already                                                               
at  the   university  with   energy  related   capabilities.  She                                                               
commented that  some individuals were  not aware of  their energy                                                               
research  capabilities and  noted an  example of  fish biologists                                                               
being involved  with ACEP's hydrokinetics program.  She said ACEP                                                               
built  teams  across   disciplines,  schools,  institutions,  and                                                               
campuses. She  said ACEP worked  closely with UAA's  Institute of                                                               
Social   and  Economic   Research  (ISER)   and  the   School  of                                                               
Engineering.  She summarized  that  ACEP  pulled together  teams,                                                               
worked on an issue, and moved on to do something else.                                                                          
                                                                                                                                
She said  ACEP worked  closely with  industry on  research teams.                                                               
She stressed  that ACEP  made sure not  to compete  with industry                                                               
and noted an  example of bringing in private  sector companies to                                                               
do a bathymetric  study for hydrokinetics work  and a geophysical                                                               
study to  support ACEP's  geothermal work in  Nome. She  said the                                                               
focus was  on formulating research questions  and determining how                                                               
the university could address them.                                                                                              
                                                                                                                                
CO-CHAIR BISHOP  commented that he  agreed with  Senator Micciche                                                               
relating to an  energy baseline concept. He said he  was a fan of                                                               
T. Boone  Pickens who  stated, "We  are going to  go down  as the                                                               
dumbest nation on  earth if we do  not get an energy  plan in the                                                               
United  States."  He noted  that  Jack  Welch said,  "The  single                                                               
number one thing  this country could do, is get  an energy plan."                                                               
He said Alaska should have an energy plan.                                                                                      
                                                                                                                                
MS.  HOLDMANN answered  that she  would not  be surprised  if Co-                                                               
Chair Bishop's words  were echoed in the Alaska  State Capital 30                                                               
years ago.                                                                                                                      
                                                                                                                                
CO-CHAIR BISHOP replied that the  words were echoed in the Alaska                                                               
State Capital 50 years ago.                                                                                                     
                                                                                                                                
MS. HOLDMANN  said energy planning  has been  worked on a  lot in                                                               
addition to  being addressed  by the  Senate In-State  Energy and                                                               
Resources  committees.  She  stated  that  she  had  worked  with                                                               
Senator  Wielechowski  in  the  past on  energy  issues  and  she                                                               
applauded  those  efforts, but  noted  that  the state  needs  to                                                               
continue moving forward.                                                                                                        
                                                                                                                                
7:43:21 AM                                                                                                                    
She  presented an  example of  how  geothermal exploration  teams                                                               
were  built at  UAF. She  noted  that there  was some  geothermal                                                               
potential in  the Cook  Inlet area  and other  regions throughout                                                               
the state. She said ACEP's  team concept led to bringing together                                                               
researchers  from UAF's  Geophysical  Institute  (GI). She  noted                                                               
that GI pioneered  a mapping technique for volcanoes  to look for                                                               
pending  eruptions   by  identifying   heat  areas   and  mapping                                                               
underground  coal  fires.  She said  ACEP  applied  GI's  mapping                                                               
technique  to low  temperature  geothermal  evaluation. She  said                                                               
ACEP received  a grant from  the U.S. Department of  Energy (DOE)                                                               
to test  GI's mapping technique  because exploration  costs could                                                               
be greatly reduced. She noted  that the challenge with geothermal                                                               
exploration  was  ACEP's highest  expense.  She  stated that  the                                                               
testing  could have  been done  anywhere  in the  U.S., but  ACEP                                                               
received the  DOE grant to  be applied  in Alaska. She  said ACEP                                                               
chose Pilgrim Hot Springs, outside  of Nome, as an ideal resource                                                               
location due to its geothermal  development potential on mainland                                                               
Alaska. She  explained that the  Pilgrim Hot Springs  project had                                                               
been successful and  its hot water source was  identified, a long                                                               
standing mystery. She said ACEP  was moving forward with the next                                                               
phases of  exploration to access  Pilgrim Hot  Spring's potential                                                               
for  community and  landowners.  She noted  that  in addition  to                                                               
geothermal  development,  a  significant  graphite  resource  was                                                               
discovered ten  miles from  Pilgrim Hot  Springs. She  noted that                                                               
ACEP  viewed plans  in isolation  as well  as a  taking a  bigger                                                               
holistic view. She said ACEP  would continue to look at locations                                                               
where  energy resources  were in  concert with  mineral resources                                                               
and Alaska's communities.                                                                                                       
                                                                                                                                
MS. HOLDMANN  said unmanned aerial  vehicles (UAV) were  going to                                                               
be used to  expand exploration. She explained that  using a UAV's                                                               
aerial  perspective for  geothermal exploration  allowed ACEP  to                                                               
expand  Pilgrim Hot  Springs' "footprint"  from very  small to  a                                                               
four mile  area. She said  Pilgrim Hot Springs was  a substantial                                                               
resource  with a  magnitude that  was larger  than the  Chena Hot                                                               
Springs resource.  She stated  that the  Pilgrim Hot  Springs had                                                               
potential for the Nome region.                                                                                                  
                                                                                                                                
7:46:16 AM                                                                                                                    
She said  the geothermal  mapping for  heat evaluation  was being                                                               
used  to target  improved weatherization.  She explained  that an                                                               
entire city could  be mapped with the largest  heat loss problems                                                               
identified and quantified.                                                                                                      
                                                                                                                                
CO-CHAIR  BISHOP addressed  the use  of UAV  and noted  that FLIR                                                               
technology  would  be  used   for  targeting  residential  energy                                                               
efficiency measures. He asked what the acronym "FLIR" stood for.                                                                
                                                                                                                                
MS.  HOLDMANN  replied  that (FLIR)  stood  for  Forward  Looking                                                               
Infrared  Radiometry.  She  explained  that  FLIR  was  basically                                                               
infrared  imaging, a  technique that  ACEP did  not develop.  She                                                               
said FLIR  was used worldwide,  but ACEP created  algorithms that                                                               
enhanced   the  processing   technique   to  remove   interfering                                                               
background  signals in  order to  identify a  quantifiable number                                                               
for heat.                                                                                                                       
                                                                                                                                
She addressed how ACEP was  funded and explained that $750,000 in                                                               
base funding  was provided annually  by the state of  Alaska. She                                                               
said  ACEP  currently had  $18  million  and 20  active  projects                                                               
across a  whole gamut of  different technology areas.  She stated                                                               
that ACEP's  team building  concept allowed  for their  grant and                                                               
contract  acquisition. She  explained  that ACEP  was a  research                                                               
enterprise that  acted as a funding  source for UA. She  said the                                                               
$18 million  in funded grants  and contracts supported  UA's base                                                               
operations and long term stability.  She revealed that $4 million                                                               
was funding  base operations at UAF  so that ACEP had  lights and                                                               
power. She brought  attention to the fact that  ACEP was bringing                                                               
in $14 for every $1 that it received from the state.                                                                            
                                                                                                                                
SENATOR MICCICHE  asked what kind  of U.S. Department  of Defense                                                               
(DOD) projects ACEP had been working on.                                                                                        
                                                                                                                                
MS. HOLDMANN answered  that ACEP had been working  with DOD quite                                                               
a  lot on  looking  at  fuel supply  issues  and  the option  for                                                               
potentially having a coal to liquids  or gas to liquids supply in                                                               
Alaska. She said  ACEP had looked at some of  the language in the                                                               
Defense bill  that related to  Section 526, a DOD  provision that                                                               
does not  allow fossil  fuels replacement  with something  with a                                                               
higher "greenhouse  gas" footprint  and the  impacts on  what DOD                                                               
could use for fuel supplies in Alaska.                                                                                          
                                                                                                                                
7:49:13 AM                                                                                                                    
MS.  HOLDMANN  said  ACEP's projects  were  funded  by  different                                                               
mechanisms  and were  dispersed  throughout Alaska.  She noted  a                                                               
legislative  requested   project  pertaining  to   Small  Modular                                                               
Nuclear  Reactor  (SMR).  She explained  that  ACEP  completed  a                                                               
comprehensive study on SMR's potential  in Alaska and opined that                                                               
SMR was a possible option for  the future, but the technology was                                                               
not currently available.                                                                                                        
                                                                                                                                
CO-CHAIR  BISHOP  commented  on  SMR and  addressed  the  use  of                                                               
thorium. He asked if there was  any merit in thorium based energy                                                               
and inquired  if China  was benefiting  from their  investment in                                                               
thorium research.                                                                                                               
                                                                                                                                
MS. HOLDMANN replied  that thorium was valid.  She explained that                                                               
there  were different  kinds of  nuclear material  that could  be                                                               
used for producing  heat to generate power.  She noted plutonium,                                                               
thorium, and several other alternatives to uranium.                                                                             
                                                                                                                                
CO-CHAIR COGHILL asked  if the thorium discussion  was ramping up                                                               
in Canada.                                                                                                                      
                                                                                                                                
MS. HOLDMANN answered that thorium  was being discussed in Canada                                                               
regarding  use as  a  process  heat source.  She  noted that  the                                                               
Canadian Oil Sands was considering  SMR for heavy oil extraction.                                                               
She  said the  issue  with SMR  in the  U.S.  was the  regulatory                                                               
process  through the  U.S. Nuclear  Regulatory Commission  (NRC).                                                               
She divulged  that Alaska  has had  a huge  impact in  moving the                                                               
discussion forward  at the  national level  due to  the [nuclear]                                                               
project that  was proposed in Galena  a decade ago. She  said the                                                               
proposed nuclear power plant pushed  the NRC to develop a process                                                               
for  SMR. She  explained that  nuclear industry  participants pay                                                               
the  NRC  for running  through  the  regulatory process,  a  cost                                                               
exceeding tens of millions of  dollars. She noted that there were                                                               
currently  no nuclear  projects  being reviewed  by  the RCA  for                                                               
permitting.                                                                                                                     
                                                                                                                                
CO-CHAIR  COGHILL commented  that  Alaska's  legislators were  in                                                               
Washington, D.C. and  spoke with the RCA. He said  the RCA stated                                                               
that  finding "project  specific" experts  to handle  information                                                               
for permitting was  hard to obtain. He explained  that the energy                                                               
industry paid  for experts  to go  on staff at  the RCA.  He said                                                               
there  was a  real [regulatory]  barrier and  noted that  experts                                                               
were  not  involved  until  someone  put the  money  down  for  a                                                               
particular project.                                                                                                             
                                                                                                                                
MS. HOLDMANN  answered correct. She addressed  Co-Chair Coghill's                                                               
interest in  biomass and  his instrumental  role in  working with                                                               
Delta High  School in  getting their  [wood chip  biomass boiler]                                                               
system up  and running. She  said ACEP was developing  their team                                                               
concept  for a  long term  approach to  biomass. She  stated that                                                               
biomass  researchers were  being  sourced  from natural  resource                                                               
schools,   conversion  technology   engineers,  and   atmospheric                                                               
science and pollution experts to look at particulate issues.                                                                    
                                                                                                                                
She  said ACEP  was going  a  step further  in addressing  energy                                                               
storage and  alternatives for grid-management with  Golden Valley                                                               
Electric Association  (GVEA) to manage their  generation sources.                                                               
She said ACEP  was looking at GVEA's Eva Creek  Wind Farm and the                                                               
use  of   ceramic  heating  as   alternative  heating   that  was                                                               
controlled at  the utility  level. She  noted ACEP's  approach in                                                               
fixing some  of Alaska's  energy issues by  looking at  the board                                                               
picture, identifying all of the  available opportunities, and how                                                               
to fix problems.                                                                                                                
                                                                                                                                
7:53:55 AM                                                                                                                    
CO-CHAIR  COGHILL addressed  the  use of  flywheel technology  to                                                               
assist utilities in managing loads  when using alternative energy                                                               
sources.                                                                                                                        
                                                                                                                                
MS.  HOLDMANN  replied  that  ACEP   would  be  testing  flywheel                                                               
technology. He  addressed the  challenges involved  with managing                                                               
power  load   storage  from   alternative  energy   sources.  She                                                               
explained  that ACEP  had been  working on  energy storage  for a                                                               
decade by  testing advanced energy  technologies and  worked with                                                               
Alaska  partners.  She  noted  that  ACEP  recently  field-tested                                                               
advanced  battery technology  in Kotzebue  and the  test was  not                                                               
successful  due to  the  battery's inability  to  function in  an                                                               
Arctic environment.                                                                                                             
                                                                                                                                
CO-CHAIR COGHILL  addressed GVEA's Battery Energy  Storage System                                                               
(BESS) and  its use for power  outages. He noted that  he had not                                                               
heard of  any critical oversight  of BESS  and asked if  ACEP had                                                               
been involved with its testing.                                                                                                 
                                                                                                                                
MS. HOLDMANN replied  that BESS had been very  successful in what                                                               
it was  designed to do and  that was to support  the northern end                                                               
of the  Intertie. She noted that  BESS was only designed  for 300                                                               
lifetime   charge-discharge   cycles.  She   addressed   Co-Chair                                                               
Coghill's  focus on  integrating  a non-firm  energy source  like                                                               
wind on  a grid and  the requirement  to use a  spinning reserve,                                                               
intermittent  storage  or  other  mechanism  for  shifting  power                                                               
support. She said  ACEP was looking at  whether [battery] storage                                                               
with  its   inherent  inefficiencies  and  costs   was  the  only                                                               
mechanism  for power  shifting support  or whether  ceramic dump-                                                               
loads  controlled  at  the  utility  level  was  an  option.  She                                                               
explained  that  ceramic  dump-loads were  heating  sources  with                                                               
inherently more efficiencies than  batteries. She noted that ACEP                                                               
was looking at viable battery technologies.                                                                                     
                                                                                                                                
7:56:55 AM                                                                                                                    
SENATOR EGAN asked for an explanation on flywheel technology.                                                                   
                                                                                                                                
MS.  HOLDMANN  responded that  there  was  an operating  flywheel                                                               
being used  at Usibelli Coal  Mine. She explained  that flywheels                                                               
stored energy  in a rotating  mass. She said the  flywheel's size                                                               
and rotational  speed dictated the  inertia available  for energy                                                               
storage.  She said  the flywheels  ACEP  was looking  at did  not                                                               
store  large  amounts of  energy,  but  could efficiently  source                                                               
small  amounts of  energy for  short periods  of time.  She noted                                                               
that if there was a gust  or dramatic shift in load, the flywheel                                                               
was used to  smooth out transient loads. She said  Alaska had not                                                               
used  flywheels beyond  Usibelli  Coal Mine.  She explained  that                                                               
flywheel technology was a potential  strategy and noted that ACEP                                                               
lab  testing  would occur  with  a  Williams Technology  flywheel                                                               
within the next six months.                                                                                                     
                                                                                                                                
CO-CHAIR  COGHILL   addressed  the  logistical   challenges  with                                                               
shipping a 50 ton flywheel.                                                                                                     
                                                                                                                                
MS. HOLDMANN  replied that some  flywheel models were  small. She                                                               
said ACEP  was working with  Boeing on flywheels and  noted their                                                               
development  of two  small flywheels  that were  based upon  high                                                               
strength, light-weight  materials. She  remarked that  Boeing had                                                               
asked if  their flywheel  program could  be transferred  to ACEP,                                                               
but  funding  was  not  available.   She  explained  that  ACEP's                                                               
flywheel niche was the integration issue.                                                                                       
                                                                                                                                
7:59:07 AM                                                                                                                    
SENATOR MICCICHE commented that  flywheel technology was over 100                                                               
years  old. He  noted that  old  compressors used  to have  large                                                               
flywheels before energy was thought to be more dispensable.                                                                     
                                                                                                                                
MS. HOLDMANN  replied that she  agreed. She explained  that there                                                               
was nothing wrong  with looking at old technology  and seeing how                                                               
it applied  in today's world.  She noted that Chena  Hot Springs'                                                               
geothermal system  was a  perfect example  and there  was nothing                                                               
new with their power plant.  She remarked that Chena Hot Springs'                                                               
geothermal  system was  essentially a  refrigeration system  that                                                               
runs  in reverse.  She explained  that the  older technology  was                                                               
currently applied in a way that could not be done in the past.                                                                  
                                                                                                                                
MS. HOLDMANN  stated that ACEP  was focused on looking  at future                                                               
economic development opportunities  for residents and businesses.                                                               
She  noted that  there  were challenges,  but extensive  dealings                                                               
with  energy  issues  provided   the  state  with  a  comparative                                                               
advantage in niche  areas where Alaska was, or could  become or a                                                               
world  leader. She  detailed an  example of  Alaska's comparative                                                               
advantage relating  to small-islanded electric grids  with excess                                                               
wind  energy that  could not  be  sent elsewhere.  She said  high                                                               
contribution renewables was  an area that Alaska  excelled in and                                                               
nowhere in the U.S. had work been done to the same degree.                                                                      
                                                                                                                                
She remarked that Alaska was  the established worldwide expert in                                                               
the integration of wind with  diesel technologies and people from                                                               
other countries had  come to learn about  its system development.                                                               
She  said  having  a  leg-up   on  energy  technologies  provided                                                               
opportunities for fledgling businesses  to potentially be working                                                               
in  other places  throughout the  world. She  noted that  Iceland                                                               
leveraged their geothermal expertise  by providing free education                                                               
for individuals  from countries  with high  geothermal potential.                                                               
She  explained   that  Iceland's  knowledge  strategy   opened  a                                                               
pipeline  for  its  geothermal businesses  to  benefit  from  the                                                               
worldwide connections  made through  its free  education program.                                                               
She said Iceland  had a leg-up with  international development in                                                               
geothermal projects.                                                                                                            
                                                                                                                                
8:02:59 AM                                                                                                                    
CO-CHAIR  BISHOP  noted  Iceland's strategy  and  explained  that                                                               
Sweden did the same thing in the bridge building business.                                                                      
                                                                                                                                
MS.   HOLDMANN  answered   that  was   correct  and   noted  that                                                               
international training was an interesting strategy.                                                                             
                                                                                                                                
CO-CHAIR COGHILL  asked to address  what technologies  had landed                                                               
well in connecting wind-diesel.                                                                                                 
                                                                                                                                
MS. HOLDMANN  replied that  Alaska had built  a lot  of different                                                               
systems that used  very different strategies. She  said there was                                                               
a system in  St. Paul that was duplicated at  a radar facility in                                                               
Tin City  where 100 percent  wind operation was attained  with no                                                               
diesel and no storage use.  She explained that thermal dump-loads                                                               
were used to heat water  with a synchronous condenser to maintain                                                               
voltage frequency support. She stated  that other strategies used                                                               
energy storage and  battery systems. She disclosed  that the plan                                                               
in  Kotzebue  was to  integrate  a  battery  system for  a  "high                                                               
penetration" wind-diesel  system. She  explained that  there were                                                               
30 developed  wind projects in  Alaska with  some underperforming                                                               
installations that could be improved.  She noted that wind energy                                                               
control  and  distribution was  another  strategy  that ACEP  was                                                               
addressing in their lab. She described  how the ACEP lab was able                                                               
to duplicate  Alaska's electric grid.  She stated that  data from                                                               
any  community could  be programmed  to simulate  any real  world                                                               
event that allowed  ACEP to tweak and improve  systems. She noted                                                               
a simulation example for Kokhanok  that allowed the developer and                                                               
manufacturer  to fix  their field  problem in  the ACEP  lab. She                                                               
referred to the Kokhanok situation  as an example of ACEP working                                                               
with industry.                                                                                                                  
                                                                                                                                
8:06:44 AM                                                                                                                    
CO-CHAIR  BISHOP addressed  Ms. Holdmann's  overview of  how ACEP                                                               
provided   technical  support   in  addition   to  research   and                                                               
development  support to  solve problems.  He  noted how  Alaska's                                                               
Institute of Technology (AVTEC)  had integrated hands-on training                                                               
for diesel,  wind, and  solar in a  real-time program  similar to                                                               
ACEP's lab  simulation program. He  said AVTEC did  "blue collar"                                                               
training  for rural  Alaskans to  maintain,  service, and  manage                                                               
their respective  energy systems. He explained  that the hands-on                                                               
training program was a win-win between ACEP and AVTEC.                                                                          
                                                                                                                                
MS. HOLDMANN  replied that cross-training between  ACEP and AVTEC                                                               
was occurring on  that day. She said ACEP's  entire wind-team was                                                               
at AVTEC for  a two-day training session with  UA researchers and                                                               
community members throughout the state.                                                                                         
                                                                                                                                
CO-CHAIR  BISHOP remarked  that ACEP  and  AVTEC had  a plan  and                                                               
worked well together.                                                                                                           
                                                                                                                                
MS. HOLDMANN referred to a  world map that showed lighting energy                                                               
use  at night.  She said  there  was a  large part  of the  world                                                               
without consistent  access to reliable electric  power. She noted                                                               
that isolated  villages were impacted  by the  information-age by                                                               
showing greater concern as to  how to recharge cell phones rather                                                               
than  powering lights  at night.  She explained  that electricity                                                               
for  isolated areas  would not  have power  grids similar  to the                                                               
Lower 48  and specified  that the  isolated areas  throughout the                                                               
world  would   have  small  "patchwork"  networks   with  similar                                                               
challenges to  Alaska's isolated villages. She  noted that ACEP's                                                               
Renewable  Integrations  Program  had  an  Australian  researcher                                                               
involved to  address Australia's 75 nonintegrated  communities in                                                               
the  Northern   Territory.  She   explained  that   the  Northern                                                               
Territory  did  high-penetration  solar-diesel  systems  and  the                                                               
concept was  comparable to  Alaska's program.  She said  ACEP was                                                               
working  on  an  international  level and  noted  that  a  Danish                                                               
researcher had been involved with  their research team. She added                                                               
that national labs had been a big partner of ACEP.                                                                              
                                                                                                                                
8:10:14 AM                                                                                                                    
MS. HOLDMANN  reiterated ACEP's lab simulation  capabilities with                                                               
its "village in  a box" concept. She explained that  the ACEP lab                                                               
was designed to  look at integration issues in  a rural community                                                               
at  full  power  levels  with  the same  sized  diesel  and  wind                                                               
systems.  She  emphasized  that  the ACEP  lab  was  scalable  to                                                               
integration issues with the Railbelt  as well as in villages. She                                                               
noted  that ACEP's  lab  was the  only facility  like  it in  the                                                               
world.  She  said ACEP  pieced  their  lab system  together  with                                                               
funding  from multiple  sources with  the concept  based on  what                                                               
ACEP  and  industry envisioned  what  was  needed  as a  tool  to                                                               
perfect  system integration.  She noted  that a  large number  of                                                               
projects were lined up for testing  in the ACEP lab. She revealed                                                               
that a problem  existed with the necessity to build  out the ACEP                                                               
lab  to achieve  the full  level of  capabilities and  technology                                                               
ranges.  She   noted  that  flywheel  testing   would  require  a                                                               
containment system.                                                                                                             
                                                                                                                                
CO-CHAIR BISHOP asked what a flywheel containment system was.                                                                   
                                                                                                                                
MS. HOLDMANN  replied that flywheels rotated  at high revolutions                                                               
per  minute (RPM)  and  a containment  system  would contain  the                                                               
flywheel  in case  of  failure. She  noted  that the  containment                                                               
system was  not a huge  cost, but a real  cost that needed  to be                                                               
developed.                                                                                                                      
                                                                                                                                
CO-CHAIR  BISHOP asked  to confirm  that  the containment  system                                                               
would address  a flywheel  that might come  apart, not  an energy                                                               
storage issue for the containment of power.                                                                                     
                                                                                                                                
MS.  HOLDMANN  explained  that  ACEP  had  been  testing  several                                                               
batteries  and  one  example  was  a  flow-battery  from  Prudent                                                               
Energy.  She  noted that  ACEP  had  worked with  Prudent  Energy                                                               
through   several    flow-battery   generations    for   possible                                                               
improvement, mechanism failure  identification, and deployment in                                                               
the  field.  She  revealed that  the  last  flow-battery  version                                                               
worked really well,  but the economic analysis  revealed that the                                                               
battery's cost was  too high and lower cost parts  changes led to                                                               
system failure. She  noted that the flow-battery  was intended to                                                               
go out  into the  field, but  the energy cost  was not  viable at                                                               
$0.26 per  kilowatt hour  (kWh). She  explained that  testing was                                                               
not about technical success, but economic viability as well.                                                                    
                                                                                                                                
MS. HOLDMANN noted  that ACEP was addressing  waste heat recovery                                                               
and brought  attention to  a success  story from  recent testing.                                                               
She  explained  that the  waste  heat  recovery device  that  was                                                               
tested was similar  to the device used at the  Chena Hot Spring's                                                               
power  plant  where  additional  power  was  generated  from  low                                                               
quality heat. She disclosed that  the tested recovery device used                                                               
a diesel generator's rejected heat  to generate power. She said a                                                               
one thousand hour  test was completed on the  waste heat recovery                                                               
device through  a range of  different scenarios and the  unit was                                                               
deployed at the Alaska Power  & Telephone's (APT) Tok power plant                                                               
for secondary testing.                                                                                                          
                                                                                                                                
8:14:11 AM                                                                                                                    
She  addressed  niche  technologies regarding  hydrokinetics  and                                                               
noted that debris was the  industry's biggest challenge. She said                                                               
ACEP had deployed  debris diversion devices and  the units worked                                                               
effectively  last  summer in  Nenana.  She  explained that  a  25                                                               
kilowatt (kW) hydrokinetic  unit was deployed via  Alaska Power &                                                               
Telephone  (AP&T) in  Eagle, Alaska  with the  deployment meeting                                                               
about half of the community's needs.                                                                                            
                                                                                                                                
CO-CHAIR  BISHOP confirmed  that avoiding  debris on  the [Tanana                                                               
River] in Nenana would be a challenge.                                                                                          
                                                                                                                                
MS. HOLDMANN agreed that debris was an issue in Nenana.                                                                         
                                                                                                                                
SENATOR  MICCICHE asked  if ACEP  was doing  any subsurface  work                                                               
that  was not  seasonally influenced.  He inquired  if permitting                                                               
departments would  be willing to allow  subsurface hydro-projects                                                               
in rivers and tidal zones.                                                                                                      
                                                                                                                                
MS. HOLDMANN replied that ACEP  had a close relationship with the                                                               
permitting  agencies  and  noted that  the  agencies  appreciated                                                               
ACEP's  comprehensive   analysis  in  order  to   streamline  the                                                               
permitting process. She explained that  the worry was not so much                                                               
with  adult fish,  but  rather with  out-migrating  smolt in  the                                                               
fastest moving  part of a river.  She noted that no  one had ever                                                               
done surveys in the middle of  a river channel and explained that                                                               
ACEP had  to devise a way  to capture fish. She  said ACEP's fish                                                               
biologists  were addressing  how to  deal with  [juvenile] salmon                                                               
migration  patterns   and  providing   the  information   to  the                                                               
applicable  permitting   agencies.  She  stated  that   ACEP  was                                                               
addressing the  permitting challenges  for the industry  and what                                                               
kind  of  information  could  be produced  to  make  the  process                                                               
easier.                                                                                                                         
                                                                                                                                
SENATOR  MICCICHE asked  about the  possibilities for  subservice                                                               
operations to avoid seasonal generation.                                                                                        
                                                                                                                                
MS.  HOLDMANN   replied  that  there   were  two   problems  with                                                               
subservice  operations. She  explained that  the current  was not                                                               
very fast  under river-ice.  She said  the river  was groundwater                                                               
fed in  the winter  and the  flow rate was  10 percent  of summer                                                               
levels.                                                                                                                         
                                                                                                                                
SENATOR MICCICHE asked about tidal possibilities.                                                                               
                                                                                                                                
MS. HOLDMANN replied  that tidal based energy would  use the same                                                               
technology as with  rivers, but ACEP was  first addressing issues                                                               
with  water  surface  debris  prior  to  subsurface  debris.  She                                                               
explained  that  both tidal  and  river  deployments need  to  be                                                               
protected and ACEP's funding request  would address the next step                                                               
to work with industry on the subsurface debris challenge.                                                                       
                                                                                                                                
8:18:07 AM                                                                                                                    
CO-CHAIR  BISHOP stated  that Senator  Huggins was  attending the                                                               
committee hearing.                                                                                                              
                                                                                                                                
MS. HOLDMANN addressed  low-temp geothermal as a  niche area that                                                               
Alaska was  viewed as somewhat  of a  leader. She noted  that the                                                               
very first  low temperature  geothermal system  in the  world was                                                               
installed at Manley Hot Springs  in 1981. She explained that low-                                                               
temp geothermal technology was pioneered  in Alaska and the state                                                               
never capitalized on  that. She said there  were opportunities in                                                               
some  of  the niche  technologies  where  Alaska had  competitive                                                               
advantages to enable local businesses  to leverage. She said ACEP                                                               
was  involved with  the Chena  Geothermal plant  while addressing                                                               
smaller units from industrial waste  heat sources. She noted that                                                               
waste heat  from oil  wellheads was  a possibility  and explained                                                               
that  the oil  industry was  in a  lot of  ways Alaska's  largest                                                               
producer of geothermal  energy on the planet because  there was a                                                               
lot of heat coming out of the  ground along with the oil. He said                                                               
waste heat  from a  diesel generator  was another  opportunity to                                                               
make more use of the fuel that was already being used.                                                                          
                                                                                                                                
SENATOR MICCICHE stated that he  was used to a typical efficiency                                                               
on a  combined-cycle to  be as  much as 40  percent. He  asked if                                                               
efficiencies  were being  realized from  waste heat  derived from                                                               
smaller internal combustion waste heat units.                                                                                   
                                                                                                                                
MS. HOLDMANN replied  that the efficiency improvements  were on a                                                               
small  scale at  a few  percentage  points. She  said the  [waste                                                               
heat]  units did  not  cost very  much and  their  cost could  be                                                               
recovered  over a  relatively short  time horizon,  approximately                                                               
three  years.  She  explained  that   projects  like  waste  heat                                                               
recovery had  a short  payback period and  did not  require grant                                                               
support. She noted  that ACEP worked with AP&T  as an established                                                               
utility to act  as a partner on projects like  testing waste heat                                                               
recovery.                                                                                                                       
                                                                                                                                
She  said AEA  had  asked  ACEP to  look  at  fuel additives  and                                                               
address improving  combustion cycle  efficiencies. She  said ACEP                                                               
was taking a holistic look at  all of the fuel additives marketed                                                               
in Alaska  to ascertain creditable information  for utilities and                                                               
industry.                                                                                                                       
                                                                                                                                
8:22:01 AM                                                                                                                    
She addressed  difficult to extract  fossil fuels and  noted that                                                               
Alaska  had a  lot of  fossil resources  with opportunities  that                                                               
were further out: heavy oil,  coal liquids, gas liquids, and coal                                                               
gasification.  She inquired  how Alaska  could take  advantage of                                                               
its  coal resources  and noted  that it  was one  of the  largest                                                               
fossil  energy reserves  in  the  world. She  said  it was  worth                                                               
keeping an eye on technologies  that might allow Alaska to export                                                               
some of its resources in the future.                                                                                            
                                                                                                                                
She spoke about arctic shipping and  noted that 46 ships took the                                                               
Northern Sea  Route in 2012,  a 10-fold increase since  2010. She                                                               
addressed  how Alaska  could take  advantage of  the new  mineral                                                               
resources  project to  be discovered  in the  Arctic and  how the                                                               
state  would fit  into the  world economy  while in-state  energy                                                               
needs were addressed.                                                                                                           
                                                                                                                                
She  addressed  Alaska as  a  leader  in energy  technologies  as                                                               
follows:                                                                                                                        
                                                                                                                                
   · Coil drilling technique pioneered in Alaska.                                                                               
   · Thermosiphons for extracting heat to maintain pipeline and                                                                 
     building foundations in permafrost-rich soil. She said UAF                                                                 
     had a big role in developing thermosiphons.                                                                                
   · Largest battery system in the world in Fairbanks, the BESS                                                                 
     system at GVEA.                                                                                                            
   · Low temperature geothermal (niche renewables).                                                                             
   · Leader in high contribution renewables.                                                                                    
                                                                                                                                
MS. HOLDMANN  commented that the  key was how  Alaska capitalized                                                               
on its leadership role in  energy technologies to create academic                                                               
and job opportunities.                                                                                                          
                                                                                                                                
CO-CHAIR  BISHOP  asked  if ACEP  interfaced  with  Alaska's  oil                                                               
industry to address their energy and operating costs.                                                                           
                                                                                                                                
MS. HOLDMANN  answered no. She  said ACEP partnered with  the oil                                                               
and gas industry in a  number of small, isolated initiatives. She                                                               
cited work  with British Petroleum  (BP), thermosiphons  use with                                                               
ExxonMobil, and remote data acquisition unit with Shell.                                                                        
                                                                                                                                
CO-CHAIR BISHOP  asked if  ACEP worked  with Alyeska  Pipeline on                                                               
projects.                                                                                                                       
                                                                                                                                
MS. HOLDMANN answered yes. She  noted project examples pertaining                                                               
to pipeline  revegetation and tapping  geothermal to add  heat to                                                               
the pipeline as a way to increase throughput.                                                                                   
                                                                                                                                
CO-CHAIR  COGHILL  noted  his   appreciation  that  Ms.  Holdmann                                                               
provided  a drive  to  ACEP. He  commended  ACEP's assessment  of                                                               
technology  options and  technology  in place.  He remarked  that                                                               
wind  technology was  being installed  in different  locations in                                                               
Alaska for  the last  decade and  asked what  ACEP had  found out                                                               
regarding wind  technology operating  in a cold,  highly variable                                                               
temperature  climate.  He  inquired   if  ACEP  was  involved  in                                                               
discussions with wind technology manufacturers.                                                                                 
                                                                                                                                
MS.  HOLDMANN replied  that  there  was a  lot  of wind  turbines                                                               
designed  to operate  in the  Arctic. She  noted that  there were                                                               
some deployed  technologies in the state  with rather substantial                                                               
failures. She explained  that one of the problems  was related to                                                               
cold air  density and the  heavier air caused problems  with some                                                               
of  the wind  turbines.  She  noted that  one  turbine brand  had                                                               
issues  with tip  breaks that  led to  some "runaway"  modes with                                                               
dramatic  failures.   She  explained  that  ACEP's   CIP  request                                                               
supported the  development of  an Arctic  turbine test  site near                                                               
Fairbanks. She said funding for the  proposed test site was not a                                                               
lot of  money and the  project was  in partnership with  AEA. She                                                               
stated  that ACEP  was not  deploying technology  down the  field                                                               
that was  not tested in  harsh environment conditions.  She noted                                                               
that the test site would be located  at a GVEA site in the Murphy                                                               
Dome area.                                                                                                                      
                                                                                                                                
CO-CHAIR COGHILL asked if ACEP  was watching current wind turbine                                                               
installations and compiling data.  He inquired if the information                                                               
was proprietary.                                                                                                                
                                                                                                                                
MS. HOLDMANN answered  that gathering data was an  area that ACEP                                                               
could  improve. She  commented  that  publically funded  projects                                                               
should provide data that was  publically available. She explained                                                               
that  project data  should be  understood in  order to  assist in                                                               
decisions for future projects.                                                                                                  
                                                                                                                                
CO-CHAIR COGHILL asked if the  issue was related to barriers that                                                               
were created or work that had to be done.                                                                                       
                                                                                                                                
MS. HOLDMANN  replied that the  tendency was  to move on  after a                                                               
project was built without going  back to identify what worked and                                                               
what the  return on investment  was. She explained that  ACEP was                                                               
working with AEA to address  project reviews, but funding was not                                                               
available.  She said  the Emerging  Energy Technology  Grant Fund                                                               
(EETGF) program was  a little different. She  explained that ACEP                                                               
pioneered the EETGF  program with the Denali Commission  to add a                                                               
contractual step to set in place  with a data management plan for                                                               
every contract. She  said the data management plan  for EETGF had                                                               
worked well,  especially with pilot  projects. She said it  was a                                                               
priority for ACEP to get better information.                                                                                    
                                                                                                                                
8:29:26 AM                                                                                                                    
CO-CHAIR  COGHILL stated  that transmission  was a  big cost  for                                                               
Alaska  and hardware  accounted  for the  majority  of costs.  He                                                               
addressed system upgrades  and asked if ACEP was  working on ways                                                               
to make  sure the electrons  flowed better. He inquired  if there                                                               
were transmission limitations  and would the state  have to learn                                                               
how to live with them.                                                                                                          
                                                                                                                                
MS. HOLDMANN replied that one  of ACEP's challenges was operating                                                               
their program without  very much base funding. She  said ACEP was                                                               
reliant  on external  grants and  contracts.  She explained  that                                                               
ACEP could not put a lot of  work into a problem unless there was                                                               
an identified  funding source.  She noted  that ACEP's  CIP would                                                               
provide the organization with some  breathing room. She addressed                                                               
the area  of transmission and noted  that ACEP had worked  on the                                                               
High-Voltage Direct  Current (HVDC)  project. She  explained that                                                               
the Denali Commission  funded an ACEP project to  look at smaller                                                               
HVDC convertors  with Alaska Village Electric  Cooperative (AVEC)                                                               
and Polar Consult Alaska, Inc.  (PCA). She said ACEP had recently                                                               
created a  fairly comprehensive  assessment of  HVDC transmission                                                               
technology in Alaska and worldwide.  She said ACEP had been doing                                                               
comparative  analysis similar  to the  HVDC project  and noted  a                                                               
comparative  analysis  was completed  on  energy  options in  the                                                               
Fairbanks  market.   She  reported  that  the   recent  Fairbanks                                                               
comparative analysis showed that  the natural gas trucking option                                                               
came out very positive in the analysis.                                                                                         
                                                                                                                                
SENATOR  MICCICHE commented  that  Alaska was  an energy  starved                                                               
state with a tendency to jump  at things that did not pencil-out.                                                               
He remarked  about his interest  in understanding  ACEP's process                                                               
in evaluating  projects. He  stated that  the key  was evaluating                                                               
energy  projects responsibly  while delivering  the best  options                                                               
for Alaskans.  He said Alaska  needs a plan  with a clear  set of                                                               
expectations  and criteria  that helps  Alaskans understand  what                                                               
was feasible.                                                                                                                   
                                                                                                                                
8:32:34 AM                                                                                                                    
MS. HOLDMANN  agreed that there  was a  tendency to just  want to                                                               
act, build, and  do something. She explained  that she understood                                                               
the urge  to build, but looking  at projects in a  systematic way                                                               
was an important role that ACEP provided.                                                                                       
                                                                                                                                
CO-CHAIR BISHOP thanked Ms. Holdmann for the presentation.                                                                      
                                                                                                                                
8:33:46 AM                                                                                                                    
There being  no further  business to come  before the  Senate In-                                                               
State Energy Committee, Co-Chair  Bishop adjourned the meeting at                                                               
8:33 a.m.                                                                                                                       
                                                                                                                                

Document Name Date/Time Subjects
In-Energy feb14.pdf SISE 2/14/2013 7:30:00 AM
In-State-Energy