Legislature(2023 - 2024)BARNES 124

01/30/2024 10:15 AM House ENERGY

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Audio Topic
10:15:28 AM Start
10:17:13 AM Presentation(s): Railbelt Decarbonization Project Results
11:54:50 AM Presentation(s): What Alaska Can Learn from Iceland's Energy Transition
12:04:25 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: What Alaska Can Learn From TELECONFERENCED
Iceland's Energy Transition by Gwen Holdmann,
Senior Researcher and Associate Vice Chancellor
for Research, Innovation and Industry
Partnerships; and Erlingur Gudleifsson, Research
Faculty, University of Alaska Fairbanks
+ Presentation: Railbelt Decarbonization Project TELECONFERENCED
Results by Phylicia Cicilio, Research Assistant
Professor, Power Systems Engineering;
Jeremy VanderMeer, Research Assistant Professor;
and Steve Colt, Research Professor, Alaska Center
for Energy and Power; and Derek Stenclik and Matt
Richwine, Founding Partners, Telos Energy, Inc.
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                        January 30, 2024                                                                                        
                           10:15 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative George Rauscher, Chair                                                                                           
Representative Tom McKay                                                                                                        
Representative Thomas Baker                                                                                                     
Representative Stanley Wright                                                                                                   
Representative Mike Prax                                                                                                        
Representative Calvin Schrage                                                                                                   
Representative Jennie Armstrong                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION(S):  RAILBELT DECARBONIZATION PROJECT RESULTS                                                                      
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PRESENTATION(S):  WHAT ALASKA CAN LEARN FROM ICELAND'S ENERGY                                                                   
TRANSITION                                                                                                                      
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
STEVE COLT, PhD, Research Professor                                                                                             
Alaska Center for Energy and Power                                                                                              
University of Alaska, Fairbanks                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION    STATEMENT:       Presented   during    the   Railbelt                                                             
Decarbonization Project Results presentation.                                                                                   
                                                                                                                                
JEREMY VANDERMEER, Research Assistant Professor                                                                                 
Alaska for Energy and Power                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION    STATEMENT:       Presented   during    the   Railbelt                                                             
Decarbonization Project Results presentation.                                                                                   
                                                                                                                                
DEREK STENCLIK, Founding Partner                                                                                                
Telos Energy, Inc.                                                                                                              
Schenectady, New York                                                                                                           
POSITION    STATEMENT:       Presented   during    the   Railbelt                                                             
Decarbonization Project Results presentation.                                                                                   
                                                                                                                                
MATT RICHWINE, Founding Partner                                                                                                 
Telos Energy, Inc.                                                                                                              
Albany, New York                                                                                                                
POSITION    STATEMENT:       Presented   during    the   Railbelt                                                             
Decarbonization Project Results presentation.                                                                                   
                                                                                                                                
ERLINGUR GUDLEIFSSON, Research Faculty                                                                                          
Alaska Center for Energy and Power                                                                                              
University of Alaska, Fairbanks                                                                                                 
Iceland                                                                                                                         
POSITION STATEMENT:   Presented during the What  Can Alaska Learn                                                             
from Iceland's Energy Transition presentation.                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:15:28 AM                                                                                                                   
                                                                                                                                
CHAIR  RAUSCHER  called the  House  Special  Committee on  Energy                                                               
meeting  to  order  at 10:15  a.m.    Representatives  Armstrong,                                                               
Schrage, McKay, Wright,  Baker, and Rauscher were  present at the                                                               
call to  order.  Representative  Prax arrived as the  meeting was                                                               
in progress.                                                                                                                    
                                                                                                                                
^PRESENTATION(S):  RAILBELT DECARBONIZATION PROJECT RESULTS                                                                     
   PRESENTATION(S):  RAILBELT DECARBONIZATION PROJECT RESULTS                                                               
                                                                                                                              
10:17:13 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER announced  that the first order  of business would                                                               
be the Railbelt Decarbonization Project Results presentation.                                                                   
                                                                                                                                
10:20:08 AM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 10:20 a.m. to 10:21 a.m.                                                                     
                                                                                                                                
10:21:21 AM                                                                                                                   
                                                                                                                                
STEVE  COLT, PhD,  Research Professor,  Alaska Center  for Energy                                                               
and Power, University of Alaska  Fairbanks, provided a PowerPoint                                                               
presentation,  titled  "ACEP   Railbelt  Decarbonization  Project                                                               
Results, and  Lessons from  Iceland" [hard  copy included  in the                                                               
committee packet].   He  stated that the  mission for  the Alaska                                                               
Center  for   Energy  and  Power   (ACEP)  is  to   "develop  and                                                               
disseminate  practical,  cost-effective,  and  innovative  energy                                                               
solutions for  Alaska and beyond."   He  said ACEP is  an applied                                                               
research  group.    He  described  the  Railbelt  decarbonization                                                               
scenarios project, the goal of  which was to explore and quantify                                                               
the   scenarios    that   aim   for   Railbelt    electric   grid                                                               
decarbonization  by 2050.   He  said ACEP  sought to  address the                                                               
economic   and   reliability  implications   of   decarbonization                                                               
scenarios   and   create   information  for   Railbelt   planning                                                               
discussions.                                                                                                                    
                                                                                                                                
10:26:03 AM                                                                                                                   
                                                                                                                                
DR.  COLT listed  the industry  partners that  assisted with  the                                                               
study  including:   ACEP, Alaska  Microgrid Group,  Telos Energy,                                                               
and  Information Insights.   Electric  Utilities from  around the                                                               
state  were also  involved in  the process  to provide  technical                                                               
feedback.   Funding  support  came through  the  Office of  Naval                                                               
Research, Hawai'i  Natural Energy Institute, and  capital funding                                                               
from the State of Alaska.                                                                                                       
                                                                                                                                
DR.  COLT described  the electric  grid as  the "world's  biggest                                                               
machine."  He  described the varying steps involved  that lead to                                                               
economic analysis including  scenario development, load forecast,                                                               
resource   selection  and   sizing,   generation  analysis,   and                                                               
transmission  analysis.   Scenarios that  were studied  included:                                                               
business   as    usual   or   fossil    fuel,   wind/solar/hydro,                                                               
wind/solar/tidal, and wind/solar/nuclear.   He explained that the                                                               
focus of  the research was  on the implications to  stability and                                                               
system cost of energy sources in a clean energy standard.                                                                       
                                                                                                                                
10:32:45 AM                                                                                                                   
                                                                                                                                
DR.  COLT, in  response  to committee  questions, explained  that                                                               
there was  a lack  of a candidate  geothermal project  that would                                                               
have been  sufficient for  Alaska.  He  explained that  even with                                                               
renewable energy  ("renewables"), fossil  fuels are  still needed                                                               
with carbon capture.   At the outset of the  project the goal was                                                               
to  aim for  100 percent  decarbonization, which  includes carbon                                                               
capture and sequestration.   He noted the  difficulty of reaching                                                               
100 percent decarbonization.                                                                                                    
                                                                                                                                
10:37:17 AM                                                                                                                   
                                                                                                                                
DR. COLT  discussed the electric  load forecast,  which projected                                                               
nearly double  the load through  electrification.   He emphasized                                                               
that the  doubling is not  specifically due to  electric vehicles                                                               
and   could  occur   through  major   industrial   loads.     All                                                               
decarbonization efforts are tasked  with handling larger electric                                                               
loads by 2050.                                                                                                                  
                                                                                                                                
10:40:24 AM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 10:40 a.m. to 10:49 a.m.                                                                     
                                                                                                                                
10:49:33 AM                                                                                                                   
                                                                                                                                
JEREMY  VANDERMEER,  Research  Assistant  Professor,  Alaska  for                                                               
Energy  and Power,  discussed resource  selection and  provided a                                                               
list  of existing  and proposed  projects for  different resource                                                               
types.  Resource sizing involved  creating a partial optimization                                                               
to  determine  the sizing  of  certain  projects based  on  cost.                                                               
Generation  from  wind  and  solar  was  cheapest  based  on  the                                                               
analysis;  however,  the  cost-effective  amount  of  energy  was                                                               
limited by  the installed capacity.   Additional  stability costs                                                               
were identified in the transmission analysis.                                                                                   
                                                                                                                                
MR. VANDERMEER explained  that firm sources of  power were needed                                                               
including hydro,  nuclear, fossil  fuel, and batteries.   Nuclear                                                               
was  not competitive  with liquified  natural  gas (LNG)  imports                                                               
based on  cost projections.   He made  note that  projections for                                                               
nuclear and tidal are especially uncertain.                                                                                     
                                                                                                                                
10:58:00 AM                                                                                                                   
                                                                                                                                
MR.  VANDERMEER, in  response to  committee questions,  confirmed                                                               
that the study  exclusively examined small modular  reactors.  He                                                               
explained  that  new coal  was  not  considered  for any  of  the                                                               
scenarios  that  were studied.    Nuclear  and coal  had  similar                                                               
characteristics  in  that  they   are  both  low-cost,  base-load                                                               
technologies.                                                                                                                   
                                                                                                                                
11:00:26 AM                                                                                                                   
                                                                                                                                
DEREK STENCLIK,  Founding Partner, Telos Energy,  Inc., explained                                                               
that  the costs  associated  with carbon  capture technology  are                                                               
difficult   to   calculate.     He   discussed   energy   storage                                                               
technologies.   He described  generation analysis  which involves                                                               
the simulation of grid operations  across the Railbelt across all                                                               
hours  of the  year, considering  changing load,  wind and  solar                                                               
availability, reliability needs, and  operating constraints.  The                                                               
analysis sought to  understand how resources can  be scheduled to                                                               
meet  load needs  while keeping  costs  low.   The analysis  also                                                               
attempted to determine how grid  operators can manage variability                                                               
and  uncertainty  of  wind  and   solar  generation  to  maintain                                                               
reliability using batteries.                                                                                                    
                                                                                                                                
MR.  STENCLIK discussed  plant and  system details  to understand                                                               
load  profiles, wild  and solar  profiles,  hydro budgets,  plant                                                               
characteristics,    operating     reserve    requirements,    and                                                               
transmission constraints.  Those  inputs are utilized in modeling                                                               
software called "Plexos,"  which is used by  grid planners around                                                               
the  world   to  provide  production  cost   simulations.    Cost                                                               
simulations  can   be  used  to  inform   economic  analysis  and                                                               
stability analysis.                                                                                                             
                                                                                                                                
MR.  STENCLIK   provided  a  chart  that   demonstrated  the  net                                                               
generation of each of the  resource types being examined in three                                                               
different portfolios.   He stated  that wind and solar  offer the                                                               
lowest cost energy  and have the potential to take  over about 50                                                               
percent of  the load in  each of the  decarbonization portfolios.                                                               
Each portfolio  still uses a  relatively small amount  of natural                                                               
gas.                                                                                                                            
                                                                                                                                
MR. STENCLIK provided a chart  that shows how resource operations                                                               
change  over the  course  of  a typical  winter  day.   Different                                                               
colors represent different sources  of energy.  System operations                                                               
change  considerably in  decarbonization portfolios  that feature                                                               
wind and  solar.   He explained that  variability can  be managed                                                               
and reliability can be maintained.                                                                                              
                                                                                                                                
MR. STENCLIK  demonstrated how dispatch conditions  are evaluated                                                               
further  in the  transmission analysis.   Challenging  conditions                                                               
are evaluated further  for stability.  He showed  a similar chart                                                               
to  demonstrate  energy needs  for  one  week  in December.    He                                                               
explained that the timing of  wind and solar generation will vary                                                               
significantly across the year.   He explained that some days wind                                                               
and solar could generate 100 percent  of the total load and other                                                               
days those  may generate no  power.  Periods of  high penetration                                                               
must   be   evaluated   in  further   detail   for   transmission                                                               
reliability.  The location of  energy generation will change, and                                                               
transmission network utilization  increases across all scenarios.                                                               
Regardless of  which decarbonization  portfolio is  selected, the                                                               
transmission grid is key to enabling flow across the network.                                                                   
                                                                                                                                
11:14:26 AM                                                                                                                   
                                                                                                                                
MR. STENCLIK,  in response to  Chair Rauscher, explained  that no                                                               
one region will  run exclusively on solar  power, rather, certain                                                               
areas  were  selected as  candidates  where  solar power  may  be                                                               
installed to generate power.  He  made note of the variability of                                                               
the weather.  Locations were chosen based on analysis.                                                                          
                                                                                                                                
11:17:11 AM                                                                                                                   
                                                                                                                                
MATT  RICHWINE, Founding  Partner,  Telos  Energy, Inc.,  defined                                                               
steady-state analysis as whether  the grid can sustain operations                                                               
in all credible grid conditions.   He defined dynamic analysis as                                                               
whether  the  grid can  recover  from  the  "shock" of  a  sudden                                                               
disturbance.  Transmission analysis  is performed on snapshots in                                                               
time.  Stability must be satisfied at every moment.                                                                             
                                                                                                                                
MR. RICHWINE explained challenges  with steady state and dynamics                                                               
and said that successful recovery  is a matter of sufficiency and                                                               
timeliness  or   response  from  the  remaining   resource.    He                                                               
described  resource technologies  such  as synchronous  machines,                                                               
which have been used for  fossil fuel, nuclear, and hydro-powered                                                               
grids.    These  technologies  are  advancing  to  inverter-based                                                               
resources which  utilize wind, solar, battery,  and tidal plants.                                                               
Newer technologies  may have more  flexibility and  potential for                                                               
enhanced performance when compared with traditional machinery.                                                                  
                                                                                                                                
MR.  RICHWINE explained  that the  study  analyzed periods  where                                                               
both energy generation is  dominated by inverter-based resources,                                                               
and the  highest tie-line loading  to test and  analyze stability                                                               
and reliability.                                                                                                                
                                                                                                                                
11:24:47 AM                                                                                                                   
                                                                                                                                
MR.  RICHWINE  outlined that  during  challenging  hours, it  was                                                               
ensured that the  grid can meet the  Alaska transmission planning                                                               
requirements  through  modeling  and simulation  while  following                                                               
industry best practices.   Grid-forming technology was identified                                                               
as  instrumental to  integrate technologies  and is  commercially                                                               
available for battery-based resources.                                                                                          
                                                                                                                                
MR.   RICHWINE   emphasized   that   finding   shortfalls   could                                                               
necessitate  a revision  to the  resource  makeup.   He showed  a                                                               
comparison of installed  capacity at each study  phase and showed                                                               
how adjustments  in the energy  portfolio can be  accomplished to                                                               
optimize resource usage and investments.                                                                                        
                                                                                                                                
11:31:31 AM                                                                                                                   
                                                                                                                                
MR. RICHWINE, in response to  Representative Prax, commented that                                                               
load  shedding is  an important  operational scheme  used by  all                                                               
Railbelt  utilities   and  was  represented  in   models  in  the                                                               
simulation analysis.  Load shedding  may occur to save the system                                                               
as a whole.   Instances of load shedding were  greatly reduced in                                                               
instances  where grids  utilized grid-forming  and inverter-based                                                               
technologies.                                                                                                                   
                                                                                                                                
11:34:38 AM                                                                                                                   
                                                                                                                                
DR. COLT  provided a graph  that showed the  capital expenditures                                                               
that  would  be  required  to  implement  the  proposed  resource                                                               
portfolios.    He  made  note   that  the  bulk  of  the  capital                                                               
expenditures  are  involved   with  "anchor"  projects  involving                                                               
hydro, tidal, and  nuclear power.  These capital  costs include a                                                               
30  percent investment  tax credit  reduction for  Susitna Hydro,                                                               
Cook  Inlet Tidal,  and small  modular reactors.   Alaska  may be                                                               
eligible for a  50 percent investment tax credit.   He emphasized                                                               
that the projects are measured in billions of dollars.                                                                          
                                                                                                                                
DR. COLT  explained that batteries  and associated  equipment for                                                               
grid support are  needed to provide reserves for  the system when                                                               
wind and solar  are not producing enough energy to  keep the grid                                                               
stable and reliable.                                                                                                            
                                                                                                                                
11:39:16 AM                                                                                                                   
                                                                                                                                
DR. COLT, in  response to Chair Rauscher,  explained that storage                                                               
and stabilizing resources  are required for the  entire system to                                                               
function effectively by providing reserves.                                                                                     
                                                                                                                                
MR. RICHWINE, in response to  Chair Raucher, offered to follow up                                                               
about the total  cost of batteries and grid support  for wind and                                                               
solar.                                                                                                                          
                                                                                                                                
11:45:29 AM                                                                                                                   
                                                                                                                                
DR.  COLT  said that  the  initial  capital investment  would  be                                                               
between $10-12 billion.  He  showed a graph that demonstrated the                                                               
base  case generation  and  transmission costs  of  service.   He                                                               
stated that  "business as  usual" costs  about $120  per megawatt                                                               
hour,  while  decarbonization  portfolios  cost  a  little  more.                                                               
Renewable resources  and nuclear  energy require  fixed operation                                                               
and maintenance, which  can be labor intensive  and translates to                                                               
more jobs for Alaskans.                                                                                                         
                                                                                                                                
11:48:13 AM                                                                                                                   
                                                                                                                                
DR.  COLT,  in response  to  Representative  Prax, affirmed  that                                                               
depreciation expenses  and interest  are included in  the capital                                                               
costs.                                                                                                                          
                                                                                                                                
DR. COLT  stated that costs  for various scenarios  projected out                                                               
to 2050  are all in the  same ballpark.  He  noted the tremendous                                                               
uncertainty involved in the economic calculations.                                                                              
                                                                                                                                
11:51:01 AM                                                                                                                   
                                                                                                                                
DR.  COLT,   in  response  to   Chair  Raucher,  said   that  his                                                               
organization  is  not  trying  to   make  recommendations.    For                                                               
scenarios   to  be   successful   in   accomplishing  2050   load                                                               
requirements and goals, upgrades  to the transmission system were                                                               
expected and  required.   Assumed upgrades  were included  in the                                                               
cost analysis.   He offered to  follow up about what  options are                                                               
most realistic.                                                                                                                 
                                                                                                                                
^PRESENTATION(S):   WHAT ALASKA CAN  LEARN FROM  ICELAND'S ENERGY                                                               
TRANSITION                                                                                                                      
 PRESENTATION(S):  WHAT ALASKA CAN LEARN FROM ICELAND'S ENERGY                                                              
                           TRANSITION                                                                                       
                                                                                                                                
11:54:50 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER announced  that the final order  of business would                                                               
be the  What Alaska  Can Learn  from Iceland's  Energy Transition                                                               
presentation.                                                                                                                   
                                                                                                                                
11:55:02 AM                                                                                                                   
                                                                                                                                
ERLINGUR GUDLEIFSSON, Research Faculty,  Alaska Center for Energy                                                               
and Power, University of Alaska  Fairbanks, provided a PowerPoint                                                               
presentation,  titled  "ACEP   Railbelt  Decarbonization  Project                                                               
Results, and  Lessons from  Iceland" [hard  copy included  in the                                                               
committee  packet].    He  listed   three  steppingstones:    the                                                               
establishment  of  heavy   industry  in  Iceland,  infrastructure                                                               
investment, and lost opportunities due to lack of development.                                                                  
                                                                                                                                
MR.  GUDLEIFSSON  explained  that aluminum  smelters  and  alloys                                                               
represent  the  load  intensive  industrial  sector  in  Iceland.                                                               
There has been infrastructure investment  in geothermal energy in                                                               
Iceland.   Iceland generates approximately six  times more energy                                                               
per capita of  electrical energy than Alaska.  The  length of the                                                               
Railbelt  grid is  similar to  the  Icelandic "ring  grid."   The                                                               
Railbelt  population  is  approximately   the  same  as  Iceland.                                                               
Previously, Iceland's  energy was produced via  fossil fuels and,                                                               
after  the  oil  crisis,  policies were  implemented  to  connect                                                               
energy  "islands"  throughout  the   country.    This  investment                                                               
eliminated the dependency on fossil fuel generated energy.                                                                      
                                                                                                                                
MR. GUDLEIFSSON  showed a  comparison of  Iceland's ring  grid to                                                               
the  Railbelt grid  of Alaska.   Iceland  represents a  good case                                                               
study to  refer to as Alaska  transforms its grid.   He made note                                                               
of how Iceland is similarly isolated.                                                                                           
                                                                                                                                
12:01:41 PM                                                                                                                   
                                                                                                                                
MR. GUDLEIFSSON,  in response to  Chair Rauscher,  explained that                                                               
projects  were  funded  by international  funding  for  industry.                                                               
Currently, almost  all transmission assets for  energy generation                                                               
are owned  by the Government of  Iceland.  There were  no private                                                               
investors.                                                                                                                      
                                                                                                                                
12:03:46 PM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER provided closing remarks.                                                                                        
                                                                                                                                
12:04:25 PM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 12:04 p.m.                                                                 

Document Name Date/Time Subjects
House Energy Presentation Railbelt Decarbonization Results Jan 30 2024.pdf HENE 1/30/2024 10:15:00 AM