Legislature(2013 - 2014)BARNES 124
02/13/2013 08:00 AM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Presentation: "emerging Energy Opportunities for Alaska" | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
February 13, 2013
8:02 a.m.
MEMBERS PRESENT
Representative Doug Isaacson, Co-Chair
Representative Charisse Millett, Co-Chair
Representative Neal Foster
Representative Pete Higgins
Representative Shelley Hughes
Representative Andy Josephson
MEMBERS ABSENT
Representative Benjamin Nageak
COMMITTEE CALENDAR
PRESENTATION: "EMERGING ENERGY OPPORTUNITIES FOR ALASKA"
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
GWEN HOLDMANN, Director
Alaska Center for Energy and Power (ACEP)
University of Alaska Fairbanks (UAF)
Fairbanks, Alaska
POSITION STATEMENT: Provided a presentation on the Alaska
Center for Energy and Power, University of Alaska Fairbanks.
ACTION NARRATIVE
8:02:26 AM
CO-CHAIR DOUG ISAACSON called the House Special Committee on
Energy meeting to order at 8:02 a.m. Representatives Hughes,
Millett, and Isaacson were present at the call to order.
Representatives Josephson, Foster, and Higgins arrived as the
meeting was in progress.
^PRESENTATION: "EMERGING ENERGY OPPORTUNITIES FOR ALASKA"
PRESENTATION: "EMERGING ENERGY OPPORTUNITIES FOR ALASKA"
8:03:27 AM
CO-CHAIR ISAACSON announced that the only order of business
would be a presentation by the Alaska Center for Energy and
Power (ACEP), University of Alaska Fairbanks (UAF).
8:03:48 AM
GWEN HOLDMANN, Director of ACEP, prefaced her presentation by
commending the work completed by the House Special Committee on
Energy during previous legislative sessions. Ms. Holdmann urged
for a holistic approach to energy issues that connects the use
of the state's domestic energy resources with economic
opportunities for its residents. If no action is taken to
mitigate the cost of energy, she estimated that about $5 billion
will be spent on diesel fuel in rural Alaska, and about $60
billion will be spent on fossil fuels for Railbelt electric
power generation. This does not include the costs of
generation, operation and maintenance, and replacing
infrastructure. Furthermore, legislative energy-related
appropriations have totaled $2.3 billion since 2008. She
pointed out if Alaska's long-term goal is addressing the price
of energy it should also be tied to economic opportunities so
there are jobs; that is the focus of ACEP's program at UAF. The
state's energy challenges are: high energy costs; fragmented
electric grid; harsh climate; location at the end of supply
lines; stranded resources; and a dispersed population. Ms.
Holdmann informed the committee ACEP is an applied energy
research program currently working on a range of energy
technologies and options. She offered ACEP as a resource to
assist in the decisions the legislature must make, and said it
can also help communities and homeowners make good decisions
about energy use. The center also connects students with
industry to work on real energy challenges. Another part of
ACEP's task is to commercialize the production of energy by
working with industry to break down barriers to production.
Regarding partnerships, she said ACEP has 30 affiliated faculty
members on all UA campuses who work on specific problems, or on
just one. The center also has many partners in industry, thus
almost every project involves private industry, utilities,
communities, and the state. As an example, she spoke about
mapping geothermal finds by forward looking infrared (FLIR)
radiometry at Pilgrim Hot Springs near Nome, the practical
application of which is to keep geothermal exploration costs
down. The funding for this research was by the U.S. Department
of Energy (USDOE).
8:13:34 AM
MS. HOLDMANN continued, noting that FLIR radiometry can also
apply to new energy challenges in the state; in fact, the device
can be flown over a community and assess the heat loss of an
entire community at one time, which would benefit the
weatherization programs funded by the state. In response to
Representative Higgins, she noted the photo provided was an
image from Canada as ACEP operates on external grants and
contracts and does not have funding to pursue this technique in
Alaska.
CO-CHAIR ISAACSON further explained that the FLIR images are
taken from unmanned aerial vehicles (UAVs) which are less
expensive to operate and a survey in partnership with the
military may be possible.
8:16:15 AM
MS. HOLDMANN recalled that the legislature funded research
conducted by UAVs at UAF and ACEP will fly a UAV survey over
Pilgrim Hot Springs next summer. She further explained that
ACEP is organized around three areas: community energy
solutions; powering the economy; and the energy field of the
future. Although communities need lower cost energy, ACEP must
focus on powering the economy through long-range economic
development. In addition, besides extracting and exporting
resources today, future resources - such as onshore methane
hydrates - are critical and Alaska can be a pioneer in this
field. She returned attention to ACEP's funding sources, and
pointed out that the center received about $18 million in 20
active projects; in fact, ACEP is a revenue source for UAF,
bringing in a significant amount of funding beyond what is
received from the state. She provided a chart that illustrated
the economic benefits of the energy research at UAF, benefits
that come from a wide range of sources. For example, ACEP and
the Institute for Social and Economic Research (ISER), UA
Anchorage (UAA), have jointly submitted a proposal to USDOE.
Ms. Holdmann said ACEP has sixteen staff members housed in
Anchorage and Fairbanks, and the program is five years old, with
projects throughout the state ranging from small modular nuclear
reactors to fossil and renewable resources. Although ACEP
cannot do everything, Ms. Holdmann said it has a focus on
advanced battery storage technology; in fact, Fairbanks has the
largest battery storage system in the world. Although the new
technology will not be built here, Alaska has the opportunity to
test the technology.
CO-CHAIR ISAACSON asked why Alaska would not build new
technology in the future if its energy programs are successful.
8:23:01 AM
MS. HOLDMANN stated that other entities are spending millions of
dollars to develop new source technologies in the U.S. and
elsewhere; however, Alaska can focus first on areas where it
does have an advantage.
CO-CHAIR ISAACSON pointed out that Ucore Rare Metals Inc., is
developing heavy strategic metals [near Ketchikan] for batteries
and other applications. He opined that Alaska has the resources
and knowledge to do everything here that can be done anywhere
else in the world.
MS. HOLDMANN agreed that Alaska has a huge opportunity to
provide raw materials such as rare earth minerals (REE). She
turned attention to one of Alaska's comparative advantages:
high contribution renewables and solving the technical
challenges thereof, such as integrating diesel engines with wind
systems. As an aside, she described the lab in Fairbanks which
is a unique recreation of a village complete with a power system
and all of its inherent problems, enabling researchers to test
new ideas and find new strategies and solutions. Returning to
comparative advantages, she said industry is interested in
working in Alaska because of its niche technical challenges,
value-added processing, and difficult to extract and transport
fossil fuels. Alaska is a pioneer in high contribution
renewables and "island" energy systems. As the world is
becoming more electrified, power generation will be more like
electrical generation in Alaska than that of the Lower 48 due to
the lack of electrical grids. Returning to the lab in
Fairbanks, she said the lab is a friendly test facility and
works with industry to fix programming and other problems and
test products before installation in the field. Another niche
technology of interest is hydrokinetics, of the emerging energy
technology grant fund applications, 20 percent for were for
hydrokinetic ocean and river technologies. She stressed that
ACEP does not build turbines, but devises devices that will make
it possible for the turbines to work in Alaska; at this time,
ACEP has installed a hydrokinetic turbine in Nenana for testing
the effects of debris and ice.
8:31:53 AM
CO-CHAIR ISAACSON asked how much electricity the test turbine
has generated, and during what time of the year.
MS. HOLDMANN advised that in the winter there is not enough flow
to generate electricity, thus generators must be removed. There
is also the need to address the issue of the outmigration of
smolt to protect the fish populations. The test unit in Eagle
was a 25 kilowatt (kW) unit which produced one-half of the
town's energy needs when it was operating. The equipment was
turned over to ACEP because the issues of debris and fish
protection made the project uneconomic. She opined this
industry is very excited about the work ACEP has done. On the
other hand, low temperature geothermal is an example of a missed
opportunity; the first system in the world was installed in
Manly and geothermal is now a giant industry worldwide. Ormat
Technologies Inc., tested its technology in Alaska at Manly Hot
Springs, and the system at Chena Hot Springs is the lowest
temperature commercial geothermal system in the world. Alaska
has not taken advantage of this to drive opportunities in the
state. At UAF the same technology is used.
8:35:54 AM
CO-CHAIR ISAACSON asked how the legislature could advance these
economic advantages.
MS. HOLDMANN said a challenge for geothermal in this state is
that the sites are not located near population centers and there
are just a handful of potential sites, unlike the situation in
Iceland. An aspect of Iceland's policy is that they offer free
education for those who will live there, go to school, and then
market Iceland's geothermal expertise back at home. She urged
the state to do something similar to establish contacts around
the world.
8:39:04 AM
MS. HOLDMANN restated the first priority is to address the
energy needs in Alaska and then export the solutions. She
returned attention to the comparable advantages of difficult to
extract fossil fuel resources: heavy oil, methane hydrates, and
underground coal gasification. None of the preceding is a
commercial technology today, but may be in the future, providing
new opportunities for Alaska exports. Taking a broader look for
the state, Ms. Holdmann displayed a map of the Northern Sea
Route and said that in 2012, 46 ships followed this route.
Alaska should capitalize on this increase because many of the
mineral discoveries will be made in the Arctic and in the
Aleutians. Alaska is also a leader in coil drilling techniques
that are used for exploration worldwide, and in thermosiphons
for extracting heat that were developed at UAF. She encouraged
the committee to use ACEP as a resource to help answer questions
by assessing technology options - as it did regarding small
modular reactors; for data collection and analysis - asking how
investments are performing; for energy analysis - to support
policy energy analyses; and for projecting possible options -
using a decision-making tool developed by UAF. She advised
there is a funding request in the UA capital budget to support
these projects.
8:44:34 AM
REPRESENTATIVE FOSTER posed a scenario of rural community
residents who are paying 40 cents per kW hour before Power Cost
Equalization (PCE) and 20 cents per kW hour after PCE. In this
situation, residents may not be enthusiastic about a renewable
energy project that reduces the cost of energy to 21 cents, even
though savings to the state will be much more. He asked how to
create an incentive for renewable energy projects under these
circumstances.
MS. HOLDMANN observed PCE takes the average cost of energy in
Fairbanks, Juneau, and Anchorage, and computes a formula to
subsidize communities that have higher costs. In addition,
there is a fuel and non-fuel component, thus if the amount of
fuel is reduced the subsidy is also reduced. She acknowledged
disagreement over whether this is a disincentive to the
development of renewable energy projects, but there is no
disagreement that often the benefit of PCE does not reach the
residents. Ms. Holdmann cautioned that a new wind farm may
reduce the PCE subsidy and benefit the state, but may not mean
that ratepayers have a lower cost on their utility bills. She
encouraged the committee to pursue changes to the PCE program.
8:48:34 AM
CO-CHAIR MILLETT recalled that the Emerging Energy Technology
Fund resulted from work with Ms. Holdmann in Fairbanks.
CO-CHAIR ISAACSON previewed some of the additional information
that will be presented to the committee and urged new members to
review existing reports and a history of the committee's
actions. He opined the presentation showed some ways to have
energy attract private investment and how to connect communities
to each other, to economic opportunities, and to the resources
around them. Co-Chair Isaacson invited Ms. Holdmann to submit
additional information.
MS. HOLDMANN advised she would forward to the committee copies
of last year's ISER report on restructuring PCE.
8:52:36 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 8:52 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Agenda Energy Committee 01232013.pdf |
HENE 2/13/2013 8:00:00 AM |
|
| House Special Committee on Energy 2-10-13 vr2.pdf |
HENE 2/13/2013 8:00:00 AM |