Legislature(2023 - 2024)DAVIS 106
04/04/2024 10:15 AM House ENERGY
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): National Renewable Energy Lab: Achieving 80% Renewable Portfolio Standard in Alaska's Railbelt with Cost Analysis | |
| 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
April 4, 2024
10:15 a.m.
MEMBERS PRESENT
Representative George Rauscher, Chair
Representative Tom McKay
Representative Thomas Baker
Representative Stanley Wright
Representative Calvin Schrage
MEMBERS ABSENT
Representative Mike Prax
Representative Jennie Armstrong
COMMITTEE CALENDAR
PRESENTATION(S): NATIONAL RENEWABLE ENERGY LAB: ACHIEVING 80%
RENEWABLE PORTFOLIO STANDARD IN ALASKA'S RAILBELT WITH COST
ANALYSIS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
PAUL DENHOLM, Senior Research Fellow
National Renewable Energy Lab
Golden, Colorado
POSITION STATEMENT: Gave a PowerPoint presentation on
developing renewables in Alaska.
ACTION NARRATIVE
10:15:27 AM
CHAIR RAUSCHER called the House Special Committee on Energy
meeting to order at 10:15 a.m. Representatives Schrage, Wright,
Baker, McKay, and Rauscher were present at the call to order.
^PRESENTATION(S): NATIONAL RENEWABLE ENERGY LAB: ACHIEVING 80%
RENEWABLE PORTFOLIO STANDARD IN ALASKA'S RAILBELT WITH COST
ANALYSIS
PRESENTATION(S): NATIONAL RENEWABLE ENERGY LAB: ACHIEVING 80%
RENEWABLE PORTFOLIO STANDARD IN ALASKA'S RAILBELT WITH COST
ANALYSIS
10:16:12 AM
CHAIR RAUSCHER announced that the only order of business would
be a presentation, titled "National Renewable Energy Lab:
Achieving 80% Renewable Portfolio Standard in Alaska's Railbelt
with Cost Analysis."
10:17:01 AM
PAUL DENHOLM, Senior Research Fellow, National Renewable Energy
Lab (NREL), gave a PowerPoint presentation [hardcopy included in
the committee packet] on developing renewables in Alaska. He
began on slide 1, which gave background on what NREL is and what
its focus is regarding energy standards and portfolios. He
continued to slide 3 and 4, where he explained the scope of the
study on Alaska's Railbelt electricity grid, as well as
explained the cost and drawbacks of the looming gas shortage in
the Cook Inlet region. He said that renewable energy is a more
stable energy source in comparison to the natural gas currently
being used in the Railbelt system. He said that developing a
renewable energy project is locking in the cost of electricity
for decades through a contractual agreement.
10:21:59 AM
REPRESENTATIVE SCHRAGE asked where the study of the Railbelt
grid came from, what the impetus of the study was.
MR. DENHOLM answered that the study originated in the governor's
office and was performed by NREL using the lab's own dollars.
He said that the study couldn't originally do cost analysis, so
the new study aims to answer the question: "Can renewables save
money?"
10:23:48 AM
MR. DENHOLM resumed his presentation on slide 6, which posed the
question of renewable energy offsetting current fuel use and
expense. He said about 7 to 8 cents of cost of energy per
kilowatt hour (KwH) in the Cook Inlet Region comes directly from
gas expenses. He said the expectation is that the cost would
rise to 10 cents per KwH. He explained how cost impacts of
renewable energy can be understood and integrated through their
uncertainty. He moved to slide 7, which explained how renewable
energy ("renewables") can reduce costs in Alaska, the challenges
associated with developing renewables in Alaska, and how Alaska
could implement renewables today. He continued to slide 8,
which explained the difference in cost between all of the
expenses associated with renewables and the current cost of
using natural gas.
10:29:46 AM
MR. DENHOLM continued his presentation on slide 9, which gave an
example of a "modelling approach" to equally divide and
distribute energy resources. He moved to slide 10, which showed
a map of the Railbelt grid and described a future plan of action
and decisions in its management. He continued to slide 11,
which described hypothetical scenarios of mixed renewable and
natural gas resource management. He said one of the biggest
deficiencies of the analysis was a lack of data on new
hydroelectric plants. He skipped to slide 13, which described
"load growth," a way to describe the phenomenon of a growing
population increasing energy demand in the associated region's
grid.
10:33:13 AM
CHAIR RAUSCHER asked whether Alaska is comparable to the Lower
48 in terms of its electrical grid management.
MR. DENHOLM answered that in the Lower 48, every single state
except for Nebraska is invested in private-for-profit utilities.
He said that Alaska is unique because the main utilities
providers are public entities.
10:34:59 AM
MR. DENHOLM resumed his presentation on slide 14, which
described transmission and interconnection upgrades that have
been made to improve the infrastructure in certain regions of
the Railbelt.
10:36:49 AM
REPRESENTATIVE MCKAY asked what the terms "PV" and "ITC" mean.
MR. DENHOLM said that PV stands for solar photovotality, and ITC
is the investment tax credit.
10:37:23 AM
MR. DENHOLM skipped to slide 16, which explained the importance
of capturing the cost-benefit of using renewable energy. He
said that historically, power is acquired through a power-
purchasing agreement, which ensures the payment on an agreed
price established in the agreement. He continued to slide 17,
which described the previously mentioned investment tax credits
that could be used towards new renewable energy projects.
10:40:51 AM
REPRESENTATIVE SCHRAGE asked how long the investment tax credit
is available.
MR. DENHOLM answered that right now it is unclear, but there is
a "safe harbor" provision that ensures that the credits will be
awarded if a project is started by a certain date, and he
offered his understanding that that date is the late 2030s,
maybe 2040.
REPRESENTATIVE SCHRAGE observed that there is a limited window
of opportunity.
MR. DENHOLM confirmed that is correct. He told the committee he
would provide more definitive data at a future time.
10:42:28 AM
MR. DENHOLM resumed his presentation on slide 18, which
explained the cost multiplier that Alaska poses when developing
new renewable energy projects in Alaska.
10:44:37 AM
CHAIR RAUSCHER asked whether [solar] energy is less valuable in
Alaska, with the inconsistent daylight hours and cold.
MR. DENHOLM responded that yes, solar energy is less valuable in
Alaska compared to a place like California. In response to a
follow-up question, he confirmed that the long days of summer in
Alaska have an effect on the efficiency of solar and noted that
the angle [of solar panels] must be changed to get the most
amount of sunlight at any time.
10:48:10 AM
MR. DENHOLM continued his presentation on slide 19, which showed
a graph of the total capital cost of renewable energy per Kwh.
In response to Representative McKay, he explained that GFM
stands for grid forming inverter or grid following inverter; the
smaller the grid, the more difficult it is to keep stable. In
response to questions from Chair Rauscher, he said he thought
the Houston solar project was included in the study. He said
small projects usually mean 100Mw and the number of panels it
would take to power a 100Mw project is comparable to multiple
football fields.
10:53:29 AM
MR. DENHOLM resumed his presentation on slide 21, which showed a
map of wind development sites along the Railbelt.
CHAIR RAUSCHER asked what the difference between developers' and
NREL data would be.
MR. DENHOLM answered that NREL uses data from the National
Aeronautics and Space Administration (NASA) that gives a good
general idea of information in a place, but local developers get
more information pertinent to the area they are studying.
10:55:32 AM
MR. DENHOLM resumed his presentation on slide 22, which gave
explanation on how renewables could be developed at a cheaper
price than natural gas. He gave multiple examples of how
additional costs could be incurred by use practices. He moved
to slide 24, which raised the question of reliability benefits,
of which he said there is only a small potential. He said all
that renewables would do is offset the use of natural gas. He
skipped to slide 26, which explained the process for finding the
least expensive option for developing renewables in Alaska. He
continued to slide 27, which showed a graph of cost savings
between different hypothetical energy use scenarios.
11:01:42 AM
REPRESENTATIVE MCKAY asked about taxes and royalties that would
be lost from less natural gas extraction in state.
MR. DENHOLM responded that the working assumption is that the
state uses imported LNG, not drilling for new gas. In response
to a follow-up question, he clarified that NREL is looking at
the marginal resource, which is likely to be LNG.
11:05:02 AM
CHAIR RAUSCHER asked what percentage of battery cost and storage
is accounted for in the study.
MR. DENHOLM answered that NREL used a minimal assumption of the
value of energy storage.
11:06:41 AM
MR. DENHOLM moved to slide 28, which explained the cumulative
savings of a certain scenario proposed in a previous slide. He
moved to slide 29, which explained the methodology to finding
the scenario with the greatest cost-benefit.
11:08:15 AM
CHAIR RAUSCHER asked Mr. Denholm to explain how the height and
elevation of a wind project affects its effectiveness.
MR. DENHOLM explained the basic design of a wind turbine and how
the height/elevation of the machine affects its effectiveness.
11:10:30 AM
REPRESENTATIVE MCKAY asked how these projects could be developed
in the harsh climate of Alaska. He also asked how vandalism
would affect the hypothetical solar panels.
11:13:41 AM
REPRESENTATIVE SCHRAGE drew attention to a February 25 article
written by the Anchorage Daily News and explained the benefits
that could come from these projects.
11:15:27 AM
MR. DENHOLM resumed his presentation on slide 30, which showed a
map of how energy capacity would increase with the newly
installed renewables. He continued to slide 31, which explained
the volatility of the costs of renewables and natural gas, and
how that influenced the study.
11:17:43 AM
CHAIR RAUSCHER asked whether it is possible to keep up with new
technology when developing renewables.
MR. DENHOLM responded that the biggest question in developing
renewables is whether it is too soon, if the next generation of
renewables would be tenfold better than the current.
CHAIR RAUSCHER asked how many solar panels it takes to
accomplish what one wind turbine could accomplish.
MR. DENHOLM answered that it would take 20,000 individual solar
panels to produce the same amount of energy as a single wind
turbine.
11:21:38 AM
REPRESENTATIVE WRIGHT asked how often renewable energy
technology changes.
MR. DENHOLM replied that technology is incrementally improving,
with small changes throughout the years.
11:23:28 AM
MR. DENHOLM continued to slide 32, which explained the
reliability prospects of renewable energy implementation. He
moved to slide 33, which he called "the scary graph," which
displayed the hourly fraction of generation met by wind and
solar. He skipped to slide 35, which explained the cost impacts
of addressing variability and reliability associated with
integrating renewables.
11:27:18 AM
CHAIR RAUSCHER asked the difference between CES and RES.
MR. DENHOLM said that the acronyms mean clean energy standard
and renewable energy standard.
CHAIR RAUSCHER asked the advantage of CES versus RES.
MR. DENHOLM advised that the potential to reduce costs is the
benefit. He said there hasn't been as much success as was hoped
for with small modular reactors.
11:29:51 AM
REPRESENTATIVE WRIGHT asked about the study's words on micro
reactors.
MR. DENHOLM responded that it all comes down to cost.
REPRESENTATIVE WRIGHT asked whether the state is moving along
too early in terms of a reactor's lifespan.
MR. DENHOLM acknowledged that that is a possibility, but pointed
out that it is a gain due to cost and federal funding.
11:31:51 AM
CHAIR RAUSCHER asked whether these studies are performed for
each state.
MR. DENHOLM said that NREL is primarily responding to the U.S.
Department of Energy's need to understand each state's energy
needs. He said NREL does individual regional studies on the
basis of funding. In response to follow-up questions, he noted
that NREL is a not-for-profit entity funded by the federal
government. In terms of whether there are biases in the
studies, he responded that NREL has specific scientific
integrities and policies that it follows no matter what.
11:36:09 AM
REPRESENTATIVE SCHRAGE said he was pleased that the committee is
receiving a nonpartisan study.
11:37:50 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:38 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| NREL 80% Cost Analysis.pdf |
HENE 4/4/2024 10:15:00 AM |
NREL Cost Analysis |
| Alaska RPS study for HENE briefing 4_4.pdf |
HENE 4/4/2024 10:15:00 AM |
NREL 80% |