Researchers with the Alaska Center for Energy and Power at the University of Alaska Fairbanks debuted the results of two years worth of study and modeling Tuesday about the Railbelt’s future options.
The Railbelt Decarbonization Study’s first phase examines four potential ways to improve the Railbelt grid, find an economical solution as energy demands increase through 2050 and examine different scenarios.
The research team includes ACEP researchers Phylicia Cicilio, Jeremy VanderMeer and Steve Colt, along with Derek Denclik and Matt Richwine of Telos Energy.
Cicilo said the project included weekly consultations with an advisory group of the Railbelt utilities. The U.S. Navy’s Office of Naval Research and an Alaska state economic development grant funded the study.
The presentation drew a larger crowd in Anchorage as well as over 50 people who attended virtually, with prompt discussion and questions.
According to the report, electricity demands will reach 1,625 megawatts by 2050, more than double the 2021 levels. The estimates are based on projected growths in population electric vehicle use and adoption of heat pumps.
The Railbelt serves 75% of Alaska’s residents from Fairbanks and Delta Junction to Seldovia and includes five cooperative utilities.
Scenarios vary
The four scenarios from the report include “business as usual” with continued use of fossil fuels, growth of residential solar and announced added and retiring projects.
“The goal was to identify projects that could be developed for each type of resource,” VanderMeer said. “In the sizing, we would figure out what to include in each scenario and how big to build it.”
VanderMeer said the scenarios include existing power generation assets such as Bradley Lake and Eva Creek Wind Farm, proposed projects such as Shovel Creek Wind Farm and Susitna-Watana and “projects we just made up” such as nuclear.
All three law-carbon scenarios considers “significant additions of wind and solar resources and battery sources” with an additional focus each on hydroelectric, tidal or nuclear resources.
“Improvements in the inverter technology of batteries, and wind and solar energy will be essential for future Railbelt grid stability,” Cicilio said.
The nuclear option would consider modular reactors in two primary centers: one in Healy and one in Beluga. According to the report, it would result in 96% zero-carbon generation.
The tidal option factors in development of Cook Inlet’s signifiant tidal resources and would achieve 70% renewable energy emissions, while and the hydro option means development of the Susitna Watana Hydro Project and an 88% renewable energy emission.
“In general, low-carbon scenarios represent a very different operating scheme than we have today,” Cicilio said. “This would be a significant change to the Railbelt and these changes do not happen over night ... they are incremental changes that would happen over time.”
The study includes several factors, including hourly energy load forecast for 2050 determined by baseload and increased electrification due to heat pumps and electric vehicles.
Other factors include where energy resources would be located, the combination of power generation, costs, curtailments, power distribution and losses, and changes in cost of service and capital costs.
Questions of generation and transmission
Telos Energy, a renewable energy analytics and engineering firm, provided models and simulations related to how renewable energy integration would work.
Derek Denclik said the generation simulations examined scheduling, management and variability based on hourly loads.
“System operations will change considerably in high wind, solar, decarbonized portfolios,” Denclik said. “But variability can be managed and reliability can be maintained.”
Under a continued business scenario, the bulk of power would be provided by natural gas and other fossil fuels, or about 1,000 megawatts.
“When you look at the other three options, you can see the zero emissions growing quite a bit and becoming the primary source of electricity across all the portfolios,” Denclik said.
With the nuclear option, for example, reactors would provide about 500 megawatts nearly consistently, while wind would make up much of the rest.
Matt Richwine said a transmission analysis determines whether the system can reliably handle the power distribution.
Richwine said some of the challenges include adapting quickly if a power plant goes offline or disruption occurs in a major transmission intertie.
“When that happens, you’re essentially separating the system and the Railbelt becomes two pieces,” Richwine said. “At that point, will those two pieces become independently viable.”
For the two parts to be independent, he said sufficient response and resources are needed to act quickly.
Richwine said improvements require a combination of synchronous and inverter-based technology to kick in.
All three of low-carbon scenarios will require upgrading the Alaska Intertie between Fairbanks and Anchorage to 230 kilovolt linen, according to the report.
The hydroelectric option would require 1,243 megawatts in additional battery storage facilities, the nuclear option 1,518 megawatts worth of batteries and the tidal option 750 megawatts.
Takeaways
VanderMeer said some project sizes, such as tidal, hyrdo and transmission, have predetermined costs. Others, such as wind, solar, battery and nuclear were optimized partially on the lowest-cost system.
“We built the scenarios with some assumptions of what will be built,” VanderMeer said. “They are not meant to be interpreted as the most optimal scenarios for 2050.”
He said main takeaways that wind and solar generation are the cheapest sources but are economically limited because of curtailment costs caused by limited transmission capacity.
Curtailment happens when renewables need to remain off even at high generation peaks because the transmission cannot handle the excess loads. Sometimes those costs can be passed on to consumers.
A second conclusion stipulates the continued need for a firm power source to stabilize renewable sources’ variability. Firm power sources can include diesel, hydroelectric, nuclear or battery storage.
However, nuclear as a firm power source couldn’t compete with the cost of imported natural gas, with the assumption that Cook Inlet’s supply would no longer be available in 2050.
Cost of decarbonization
Each model has its own associated cost, ranging from $2.3 billion annually under doing business as usual to $11.8 billion to develop a combined solar/wind/hydroelectric system with construction of the Susitna project.
The tidal option would require $7.7 billion in investment and nuclear would require $10.1 billion in investment.
Colt, who developed the economic outcomes for the four models, said the report comes with five economic sensitivity scenarios.
“These are all illustrative cases that try to explore the uncertainty,” Colt said, clarifying they are projections based on available data, not concrete numbers.
The sensitivity scenarios factor in higher fuel costs, higher interest rates than anticipated, 20% lower capital expense interest rates for major renewable projects, much more favorable federal investment tax credits for wind projects (50% versus the base 30%) and the risk that major renewable projects could shoot up 20%.
With business as usual, Colt said the state and Railbelt utilities will spend about $750 million annually on fuel to keep the lights on.
Should utilities, developers and the state invest in low-carbon options, it could spend a minimum $650 million annually for capital costs and interest rates.
“My takeaway is that all these costs are all in the same Fenway ballpark,” Colt said.
Cicilio agreed, adding “there are great uncertainties in the costs 27 years into the future.”
Costs will vary, she added, as projects also require investments in transmission infrastructure and some reliance on current power generation assets.
However, the renewable energy projects qualify for federal tax credits that could substantially reduce the cost.