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Renewables on Alaska electricity grid Major progress in consolidated use of power generation assets leaves questions over the practicalities and benefits of wind power Alan Bailey Petroleum News
As reported previously by Petroleum News, the utilities that own and operate the electrical system in the Alaska Railbelt have made significant progress towards pooling the use of their power generation and transmission assets, to reduce the cost of electricity for consumers.
In particular, Chugach Electric Association, Municipal Light & Power and Matanuska Electric Association are forming a Southcentral power pool, to ensure maximum use of their most efficient power stations. But how might this relate to the use of renewable energy sources such as wind power in the Railbelt?
There are locations in the Railbelt with abundant wind resources. And wind farms, because they do not use fuel, offer the benefits of predictable and stable electricity pricing coupled with the absence of air emissions. But wind power also suffers from the disadvantage of high levels of variability, with the power output going up and down in response to short-term variations in wind strength. This variable power output needs to be counterbalanced in a process called regulation by some alternative power source, such as gas-fueled generation or hydropower. The cost of this regulation can undermine the economics of the wind farm use.
Three wind farms Currently there are three operational wind farms on the Railbelt grid: Cook Inlet Region Inc.’s farm on Fire Island, offshore Anchorage; Golden Valley Electric Association’s wind farm at Eva Creek; and a small independent wind farm connected to GVEA’s system at Delta Junction. CIRI wants to expand its wind farm but has been experiencing difficulties in finding customers for the increased power output. And there is a dispute in progress between GVEA and the operator of the Delta Junction wind farm over a proposed expansion of that facility: GVEA argues that the expansion is uneconomic and would increase the cost of electricity for its customers; Delta Wind Farm has disputed GVEA’s economic calculations.
Chugach currently buys power from the Fire Island wind farm but, because of issues relating to regulation of the power, does not use all of the wind power potentially available from the facility.
Wind power in North America During a Sept. 27 meeting of the Regulatory Commission of Alaska, Chris Rose, executive director of the Renewable Energy Alaska Project, made the case for ramping up the use of renewable energy, including wind power, in the
Railbelt. Rose argued that high levels of penetration of wind power in the electricity grids in various regions of North America demonstrate that the integration of wind power into the electricity supply is practical. Moreover, the cost of renewables, in particular wind and solar power, is dropping steadily, Rose said.
Diversification of the power generation technologies improves the overall reliability of the power supply system while also helping to stabilize electricity pricing, Rose argued. And many large companies now require 100 percent renewable electricity to power their operations - if Alaska wants to diversify its economy by attracting major companies to the state, the availability of renewable energy will prove important, he commented. Rose cited data centers as one form of business that might come to Alaska if adequate renewable energy is available, given the relative efficiency of cooling the data storage equipment in Alaska’s low-temperature environment.
And Rose argued that current issues around the curtailment of Fire Island power result from current constraints in the operation of the Railbelt transmission grid and the absence of a fully grid-wide load balancing system. Without those constraints, electrons from Fire Island could flow more freely around the system, thus mitigating the regulation challenges, he said. Rose also commented that Kodiak and a number of rural communities in Alaska use a relatively high proportion of wind power, despite having small electricity grids.
Balkanized grid Currently different sectors of the Railbelt transmission grid are owned and operated by different utilities and the state of Alaska. One current constraint on the transmission of electrons across the system is the manner in which the different transmission fees for use of different grid sectors pancake on top of each other, thus potentially rendering it uneconomic to ship wind power over long distances.
In 2015, following an investigation of the various issues relating to the operation of the Railbelt transmission grid, the RCA issued an opinion that unification of the grid should proceed. Since then, the commission has been encouraging voluntary unification efforts. The Sept. 27 RCA meeting was primarily designed to review progress in one component of unification, the pooling of power generation.
But in addition to the move towards power pooling, the utilities are in the process of setting up business arrangements for the unified operation of the transmission grid by a transmission company, or transco. The transco would presumably deal with the rate pancaking problem.
Unified operator Another component of grid unification is the formation of a unified operator for the entire Railbelt, to set policies for grid operations and development, and to oversee economic dispatch, the dispatch of pooled power across the grid. In 2011 the Railbelt utilities formed a company called the Alaska Railbelt Cooperative Transmission and Electric Co., or ARCTEC, to try t move forward on the system operator concept. However, only four of the six Railbelt utilities are currently ARCTEC members.
Rose, in his presentation to the RCA, argued the importance of establishing a system operator that is relatively independent from the utilities. An independent system operator can establish a level playing field for all grid users, including would-be renewable energy providers, by ensuring non-discriminatory access to the system, transparent transmission pricing and the economic dispatch of power, Rose said.
The utilities have in the past expressed concern that there needs to be utility involvement in the system operator function, because of utility expertise in how the power grid operates.
New gas-fueled generation One particular issue in the Railbelt is the fact that the utilities have recently built substantial new capacity in natural gas fired power stations, to the potential detriment of renewable energy development. Although some people have argued that the utilities overbuilt this new generation capacity, the utilities have said that they needed to replace outdated power stations and that the new highly efficient capacity is appropriate to the meeting of power supply reliability requirements.
The power pooling that the utilities are implementing currently revolves around the maximum use of these new high-efficiency, natural gas fueled power stations, leaving unanswered some thorny questions over wind farm use.
The regulation challenge Chugach currently uses hydropower and the utility’s own gas-fired generation to regulate the Fire Island power that it buys. During the Sept. 27 RCA meeting utility officials explained that Chugach’s wind farm regulation will take place outside the power pool that
Chugach, ML&P and MEA are establishing. Essentially, the power pool will handle base load power, while the regulation of wind and the regulation of short-term fluctuations in the electricity load will be layered on top of the pooled energy supply that meets the base load.
Mark Fouts, Chugach executive manager of fuel and corporate planning, explained that constraints in the power supply arrangements result in the need to curtail some Fire Island power output that might otherwise be used. In particular, if the regulation requires changes to the output from Chugach’s gas-fired power stations, gas pressure limitations in the pipelines that supply gas to the power stations limit the extent to which the gas-fired power can be changed, Fouts said. For example, gas delivered into a pipeline has to be used, to avoid an excessive pressure buildup.
Fouts also commented that all of the new high efficiency power generation operated by Chugach, ML&P and MEA is fully committed to the operation of the new Southcentral power pool. Any use of this generation capacity to regulate wind power would divert output from these power plants away from the power pool and into the wind regulation, a procedure that would reduce the efficiency of the power pool. The use of the high-efficiency power generation units to regulate wind would also become a tradeoff between the possibility of using more wind power, which would not generate emissions, and the burning of more gas for the regulation, which does create emissions, Fouts explained.
Henry Dale, a consultant to GVEA, also commented that the Eva Creek wind farm is currently an obstacle to GVEA joining the Railbelt power pool, because GVEA’s membership of the pool would likely result in significant curtailment of Eva Creek output.
Commercial issues Commissioner Robert Pickett, reflecting on the wind power issue, commented that the utilities had invested somewhere in excess of $1.5 billion in new generation, mostly gas fired, in the last six or seven years and that the commission has to allow the utilities to set rates that enable the recovery of this investment. This capital expenditure will be paid for, he said. There is no renewable energy portfolio standard in Alaska and, while the price of fuel used for power generation is unpredictable, independent power producers wanting to connect to the Railbelt grid tend to seek stable, long-term power purchase agreements that facilitate the obtaining of financing, Pickett said.
Meanwhile CIRI has reported increasing output from its Fire Island wind farm: In 2016 the facility generated 55,580 megawatt hours of power, up from 50,170 in 2015 and 47,470 in 2014. Energy production in 2016 was 8.6 percent higher than anticipate, with operating expenses 5.3 percent below budget, according to a recent CIRI newsletter.
The debate over wind power in the Railbelt will doubtless continue.
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