Legislature(2023 - 2024)BARNES 124
01/30/2024 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Railbelt Decarbonization Project Results | |
| Presentation(s): What Alaska Can Learn from Iceland's Energy Transition | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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 |