[Senate Hearing 111-130]
[From the U.S. Government Publishing Office]
S. Hrg. 111-130
RENEWABLE ENERGY PRODUCTION, STRATEGIES, AND TECHNOLOGIES
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
TO
CONSIDER RENEWABLE ENERGY PRODUCTION, STRATEGIES, AND TECHNOLOGIES WITH
REGARD TO RURAL COMMUNITIES
__________
CHENA HOT SPRINGS, AK, AUGUST 22, 2009
Printed for the use of the
Committee on Energy and Natural Resources
U.S. GOVERNMENT PRINTING OFFICE
53-003 WASHINGTON : 2009
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
BYRON L. DORGAN, North Dakota LISA MURKOWSKI, Alaska
RON WYDEN, Oregon RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont JIM BUNNING, Kentucky
EVAN BAYH, Indiana JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
C O N T E N T S
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STATEMENTS
Page
Dodson, Jim, President & CEO, Fairbanks Economic Development
Corporation, Fairbanks, AK..................................... 44
Donatelli, Barbara, Senior Vice President, Administration and
Government Relations, Cook Inlet Region Inc., Anchorage, AK.... 39
Haagenson, Steve, Executive Director, Alaska Energy Authority,
and Statewide Energy Coordinator, Anchorage, AK................ 10
Hirsch, Brian, Senior Project Leader, Alaska National Renewable
Energy Laboratory, Chena Hot Springs, AK....................... 5
Holdmann, Gwen, Director, Alaska Center for Energy and Power,
University of Alaska, Fairbanks, AK............................ 16
Johnson, D. Douglas, Director of Projects, ORPC Alaska, LLC,
Anchorage, AK.................................................. 49
Karl, Bernie, Proprietor, Chena Hot Springs Resort and Geothermal
Power Generation Facility, Chena Hot Springs, AK............... 36
Meiners, Dennis, CEO, Intelligent Energy Systems, Anchorage, AK.. 52
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 1
Rose, Chris, Executive Director, Renewable Energy Alaska Project
(REAP), Chena Hot Springs, AK.................................. 20
APPENDIX
Responses to additional questions................................ 63
[Due to the large amount of materials submitted, additional
documents and statements have been retained in committee files.]
RENEWABLE ENERGY PRODUCTION, STRATEGIES, AND TECHNOLOGIES
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SATURDAY AUGUST 22, 2009
U.S. Senate,
Committee on Energy and Natural Resources,
Chena Hot Springs, AK
The committee met, pursuant to notice, at 10:22 a.m. at
Chena Hot Springs Resort, Milepost 56.5, Chena Hot Springs
Road, Hon. Lisa Murkowski presiding.
OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM
ALASKA
Senator Murkowski. All right. Good morning. We will call to
order this hearing, this field hearing of the Senate Energy and
Natural Resources Committee. The hearing this morning is
concerning the potential importance of renewable energy power
sources to meet our Nation's energy needs.
It's wonderful to be here at Chena Hot Springs. It's
wonderful to be outside, even if we are in a tent, but being
here on a Saturday morning on a glorious Interior day is
terrific.
What we will focus on today is the importance of renewable
energy power sources, as I say, to meet our Nation's energy
needs, what types of technology we should be working to foster,
what financial assistance may be needed from Congress to make
these differing types of energy expand nationwide. Of course,
of particular interest at this hearing is the use of renewable
energy in high-cost rural areas.
Before I move further into my opening comments, I want to
recognize a few individuals. First, my colleague, Senator
Stevens, has joined us here this weekend. Senator Stevens has
long been a leader in advancing energy issues in this State,
and I'm delighted that he is with us today. We have
Representative Paul Seaton from Homer who is with us. We also
have Representative John Harris--actually Speaker John Harris
has joined us. As others come into the room, I'll hopefully be
able to acknowledge them as well.
We know that renewable energy has been a topic, a very
popular topic, in recent years in Congress. Back in 2005 we
passed the Energy Policy Act. We provided in that act a host of
research and development grants and tax aid for renewables.
Then in 2007, in the Energy Independence and Security Act, we
went even further, providing more aid for geothermal and for
ocean energy projects, and earlier this year we extended the
renewable tax credits for a number of years. This winter the
Obama administration suggested that this country should be
spending $15 billion a year to expand renewable energy
production.
We know that we've got a long ways to go when it comes to
furthering the use of renewal energy. Petroleum last year
accounted for 39 percent of our total energy needs, natural gas
accounted for 23 percent, coal 22 percent, and nuclear power
was at 8 percent. All renewables together accounted for just 7
percent of our Nation's total energy production, and what we
think of as new renewable, which is the wind, the solar, the
geothermal, and new forms of biomass, this is just at about 3
percent. So we've got a long ways to go.
But it is a real improvement in the past 5 years. Since
2003 we've seen wind energy generation triple, up above 1
percent of total energy generation. Biomass still leads all
renewables, accounting for 53 percent of renewable energy with
hydropower in second place at 36 percent. Wind and geothermal
are holding in there at about 5 percent, solar electricity
accounts for 1 percent of renewable energy, and ocean marine
energy development is barely a rounding error at this point in
time.
But as Alaskans we know that renewable energy offers great
potential in this State, where we see--particularly during the
winter, our electricity from diesel generation costing about--
an average of about 65 cents per kilowatt hour. I was in Newtok
yesterday. They're sitting at about 85 cents a kilowatt hour.
Given those prices, anything that supports free fuel may
produce real cost savings, if the capital construction costs
can be financed and can be controlled.
About 40 percent of the State might benefit from geothermal
energy, either shallow vent geothermal, or the future enhanced
geothermal systems that are now under study.
Right now about 24 percent of our State's total electricity
comes from hydropower. There's about 28 hydroprojects that are
currently producing electricity statewide. But we've got about
another 250 projects that are already identified sites for
hydroelectric generation from lake taps to water diversion from
streams and rivers.
We lead the Nation here in Alaska in the amount of power
that we could gain from ocean marine hydrokinetic projects,
using the waves, using the currents to produce our power. Just
the State's southern coast theoretically could produce 1,250
terawatts of power a year. This is 300 times more power than
Alaskans use each year.
We also lead the Nation here in Alaska in traditional per
capita biomass. Alaskans are burning about 100,000 cords of
firewood each year for space heat. The State is already burning
8 million gallons of fish oil a year down in Kodiak to power
boilers to dry fish meal, and using some of that for
electricity generation.
We generate 650,000 tons of garbage a year, which Fairbanks
is already planning to convert into energy. Anchorage is
underway on generating 2.5 megawatts of electricity from
methane gas produced by the Anchorage landfill. This is enough
to power 2,500 homes. None of these forms of biomass take into
account the 9.5 million acres of timber lands in the Tongass
National Forest in the Southeast, or the lands and timber lands
in the Chugach National Forest down in Southcentral.
We all know about our enormous wind potential here in the
State. Kotzebue has 17 wind turbines that are currently
producing about 8 percent of the community's power. There's
more wind turbines already erected in dozens of villages in
rural Alaska. Most of southern and western Alaska possess the
best wind potential in the whole country. We've got the Fire
Island wind farm that's on the threshold of construction in
Anchorage, there are good wind sites south of Fairbanks, and
AVEC, the Alaska Village Electric Co-op hopes to install more
than 50 turbines in 36 rural villages, if they can find the
money, it's always about the money. But the plan is out there.
All of these sites, particularly the large geothermal sites
in the Aleutians and the hydro sites, offer the possibility of
using renewable energy to generate hydrogen fuel or ammonia
fuel that hopefully, someday, we could export, like we export
our oil today, to fuel Alaska's economy of the future.
Now, this hearing is meant to focus on the renewables, to
look at what the development can mean for the State, and
especially to look at the very innovative ways that technology
can be used to generate renewable energy and energy
efficiencies that will ultimately lower consumers' costs.
You know, I mentioned the high prices that we're paying.
When we think about what happened last year when Alaska as a
State--actually the country as a whole, but more particularly
the remote villages just got nailed with the high prices of
fuel, and, you know, we don't have a lot of margin for error
there.
We've had congressional hearings back in Washington DC.
Some of you have had an opportunity to speak at them. The
congressional hearings are a little bit different breed than
what you may have experienced if you have gone down to Juneau.
Congressional hearings almost never permit unlimited verbal
testimony, although someone can submit written testimony for
the hearing record. I'll give you the address later if you
would like to submit some testimony if what you hear today
prompts something that you would like to submit.
Today at the hearing we've got two panels of witnesses
intended to provide a host of information. The witnesses will
cover an overview of renewables, their need and potential, and
what the Federal Government should be doing to increase their
energy generation. I expect we're going to hear some innovative
suggestions. I hope we will get some innovative suggestions for
the technology in the future, and perhaps better information
than what we get in Washington for how renewables can be
harnessed to generate the power while we're producing less
carbon.
We have a court reporter here today, and everything that is
said will be part of the record to be taken back to DC, and
this testimony from the hearing will be made available to other
Senators on the Energy Committee hearing. So the good ideas
that are presented today will be reviewed and studied by the
Senate members and staff. So I'm hopeful that this hearing will
be a useful springboard to advance renewable energy
development, both here in Alaska and nationwide.
So hopefully, we're counting on it being a good sounding
board to hear what we in Congress should be doing when it comes
to both a policy and a financial aid standpoint to help
renewable energy development.
The sites today--when I spoke with Senator Jeff Bingaman,
who is the chairman of the Energy Committee, and indicated that
we wanted to hold this field hearing at the Chena Energy Fair--
we indicated that this was the perfect place to do it. Chena is
the first site in the country, first site in the country, to
sport a working low-temperature geothermal power plant. As you
know, the plant is powering the PA system here this afternoon
and everything else from the ice museum's chiller system to the
greenhouse fans and lights.
Then later this afternoon I will be participating, as I'm
sure many of you will, in the christening of the first truly
mobile, self-contained geothermal power plant. It's been built
here, and it's awaiting field testing in Florida.
The innovations here at Chena that have been developed by
Bernie Karl, who will be one of our witnesses on the second
panel, and those who have helped him, are truly an inspiration
for a host of renewable projects that are under consideration
throughout the State. Whether it's the Fire Island wind project
or Mount Spurr or Naknek, Manley Hot Springs, or Atukan,
geothermal projects. Whether it's the hydroprojects that we're
talking about, Lake Chakachamna, Susitna, the Grant Lake
hydropower near Dillingham, we've got Thayer Creek down in
Angoon. There's so much out there.
So I'm hopeful that with this hearing and what we gather
today, we're going to be moving toward the day when there are
the resources at the Federal, State, and local level to make
these projects proceed. Later this afternoon at the energy
fair, I'll talk a little bit more about what the Federal aid is
and what's out there and available to further renewables. But
right now I would like to hear from our witnesses about what
more we should be doing to spur our renewable power generation,
where we should be focusing those limited resources.
So today, this morning, we have on our first panel Mr.
Brian Hirsch. He's the senior project leader in Alaska for the
U.S. Department of Energy's National Renewable Energy Lab. We
also have a gentleman that is familiar to so many in the energy
world, Steve Haagenson, who's the director of the Alaska Energy
Authority. We have Gwen Holdman. Gwen has taken me around Chena
here numerous occasions explaining all the wonders of what goes
on. Gwen is now the director of the Alaska Center for Energy
and Power at the University of Alaska Fairbanks. We also have
Chris Rose. Chris has truly been a leader in renewable energy.
He's the executive director of the Renewable Energy Alaska
Project.
So, ladies and gentlemen, it's a pleasure to welcome you
here today. Without further adieu, why don't we start with you,
Mr. Hirsch, and just go down the line. We'd ask you to try to
limit your comments to about 5 minutes. Your full written
statement will be included as part of the record. So if you
want to summarize or add on anything, we'd certainly appreciate
it. But welcome to you.
STATEMENT OF BRIAN HIRSCH, SENIOR PROJECT LEADER, ALASKA
NATIONAL RENEWABLE ENERGY LABORATORY, CHENA HOT SPRINGS, AK
Mr. Hirsch. Thank you, Senator. Thanks for the opportunity
to discuss renewable energy technology and development,
especially as it pertains to rural energy in Alaska, and the
U.S. Department of Energy's involvement in these issues.
As you stated, I am Brian Hirsch, on assignment here in
Alaska with the National Renewable Energy Laboratory, which is
the U.S. Department of Energy's primary National Laboratory for
research and development on energy efficiency and renewable
energy issues.
In recent years DOE and NREL has been called upon to
provide on location technical assistance and support to State
and local entities, especially in locations like Alaska where
there's high costs, complexities, and challenges around
logistics and rugged climates.
We face many challenges here in providing energy for the
State and the Nation. My testimony here will look primarily at
what we've been able to accomplish, and challenges and
opportunities for the future.
Alaska's well known for our substantial fossil fuel
resources. We are less well known for our renewable energy
opportunities, but they are equally abundant. We believe that
with proper development, they can support vibrant communities,
help the environment, and a prosperous future. We need look no
further than Chena Hot Springs, as you mentioned.
The U.S. Department of Energy has been involved very much
with everything from the very initial wells and development of
the lowest temperature electricity producing geothermal systems
here, as well as the mobile geothermal system that will be
unveiled today, and an experimental 3,000 foot well that is
also looking at enhanced geothermal production that may have
broader application throughout Alaska and the country.
As you mentioned, Alaska has substantial tidal and wave
potential. The Electric Power and Research Institute estimates
that Alaska has 80 percent of tidal and 50 percent of wave
potential for the entire country. Just harvesting a small
portion of that would more than meet Alaska's needs and allow
us to export and support energy needs in the Lower 48 and
elsewhere and become a renewable energy exporting State, as
well as a fossil fuel exporting State.
Challenges associated with that have to do with converting
the energy, delivering it to shore, and where it's needed, and
storing it for the time of year. Because of our extreme
seasonality, Alaska is the most challenged of any State in the
country on these issues. These are the areas of our focus.
So, for example, we've been partnering with the Denali
Commission on an emerging energy technology grant program that
both the National Renewable Energy Laboratory and the National
Energy Technology Laboratory combined establishing the Arctic
Energy Office is on the review committee, and we are targeting
experimental technologies that really have the most potential
benefit for Alaska around these storage and delivery issues.
Alaska has considerable wind resources, as you mentioned.
The U.S. Department of Energy has a cost share with the State
of Alaska on an anemometer loan program that can measure the
wind resources, and high-resolution wind maps to identify and
pinpoint where those wind resources are. We've identified over
100 communities, primarily on the coastal areas, that have
commercially developable wind resource, or cost effective wind
resource.
Over the past several years, through congressionally
directed projects, we have supported initiatives around in
Kotzebue, on Saint Paul Island, in Selawik and other areas with
the utilities in those communities. DOE's and NREL's early
support of these projects help to answer important questions
about wind turbine performance in cold weather, constructing
foundations in permafrost, and integrating wind power into
local electric grids.
Because of these early and sustained efforts, Alaska is now
widely recognized as a world leader in wind-diesel technology.
We are working closely with the University of Alaska Fairbanks,
Alaska Center for Energy and Power to help establish what's
called the Wind-Diesel Application Center. I suspect you may
hear a little bit more about that on this panel later. There's
also several community scale wind energy projects now operating
or under construction throughout the State as a result of some
of these early efforts.
DOE's Tribal Energy Program is quite actively fostering
solutions as well. For example, one of the projects we thought
of is a comprehensive biomass effort in the village of Fort
Yukon with the Council of Athabascan Tribal Governments. That
project is looking at everything from forest management and
local business development to diesel fuel substitution for
district heating, and eventually electricity production. Which,
electricity production is really a challenge still. Heating is
a lot easier to do, and so really the cutting edge of the
technology is using biomass for these combined heat and power
units. So that's another area of focus that once we figure that
out will be widely transferrable to other parts of the State,
and likely the Nation.
Other Tribal Energy Program successes include photovoltaic
or solar electric system installations in Arctic Village, the
furthest north tribally owned tracking array in the world--
solar tracking array in the world in Venetie Village and Lime
Village. I was personally involved in some of the installations
prior to my work here at NREL in the Arctic Village and Venetie
installations. DOE was a fundamental and important partner in
both installation and some of the monitoring and distribution
of the information and performance from those systems.
Like early wind projects, installing solar panels in far
northern regions, we've been able to answer questions about how
well the solar panels perform in cold weather. What we've
found, among other things, is that cold weather actually
improves performance of the solar panels because there's less
resistance in the panel itself. We haven't quite figured out
how to get the solar panels to produce energy in the dark yet.
We're working on that one. I think that's way out there in the
future. But what we realize more so, seriously, is that
obviously solar panels are not going to be a year-round
solution. But for up to 8 months a year, they substantially
improve the energy portfolio in many of the rural areas.
In-stream hydrokinetic is another very promising
technology. Also in my former life, prior to working at NREL, I
was involved in the installation of the first in-stream
hydrokinetic turbine in the country on the Yukon River in the
Village of Ruby. There is an exact replica of the turbine, I
noticed, out here for people to observe at the Energy Fair here
today. So that was with the Yukon River Intertribal Watershed
Council Consortium of 70 tribes and the First Nations in Alaska
and Canada, along with the Ruby Tribal Council and the city of
Ruby. There is tremendous potential of taping of power and
moving water in Alaska's streams and rivers.
The Alaska SeaLife Center in Seward is researching the use
of ocean water as a heat source for heat pumps. This is another
exciting and innovative project that has wide-scale potential
for replication throughout the country--throughout the State
and country in coastal areas.
Emerging opportunity that probably is not widely recognized
is improved energy efficiency with marine vessels. Alaska
produces over 50 percent of the Nation's seafood, and is highly
dependent on long-distance shipping for harvesting, importing
and exporting, which adds significant costs to all goods that
come from outside. Some new diesel engines, modern controls,
and operational strategies such as replacing hydraulics with
electric motors have the potential to save between 10 and 40
percent of existing fuel. There's so many goods that come here
from outside that we don't quite realize the hidden costs of
some of that improved energy efficiency.
Along those lines we're also looking at electric vehicles,
in particular in the rural areas, for things such as four-
wheelers and snow machines. There's also an effort on designing
site and culturally appropriate housing. There's a project that
the Cold Climate Housing Research is doing--Cold Climate
Housing Research Center, excuse me, is doing through their
Northern Shelters Program--that is in Anaktuvuk Pass. That is
combining traditional Inupiat design principles with modern
technologies to create a low-cost, net zero energy home that is
also--the process at least is widely applicable to elsewhere.
My testimony is primarily focused on rural areas, but DOE
and NREL have also been active in the Railbelt with our
regional integrated resource planning effort and looking at
some of those projects that you mentioned earlier, Senator, the
Fire Island wind project and Mount Spur geothermal and Lake
Chakachamma and Susitna hydroprojects. We're also working with
developers and industry in Cook Inlet and Kachemak Bay looking
at some tidal resource potential for the large urban areas of
Alaska.
So as we prepare for energy efficiency and renewable energy
driven economic transition, we're also looking at work force
development issues, and trying to nurture green jobs wherever
possible. Also looking at smart grids which have tremendous
potential in Alaska because the grid is of a size that we can
actually manage. Some of the issues down in the Lower 48 are so
large that it's very difficult to even run projects and say if
that's going to actually have a real impact in a large scale,
where here in Alaska from island communities to just small
remote areas, there's much more of an opportunity to do so.
Finally, I would just draw your attention to DOE's
activities involving the administration of the American
Recovery and Reinvestment Act. There's $18 million of
Weatherization Systems Program, $28 million of the State Energy
Program, $14 million of the Energy Efficiency and Conservation
Block Grant Program, as well as another $12 million that's
directly going to Tribal and--Tribes and Native Corporations
through the Energy Efficiency and Conservation Block Grant
Program, totaling over $72 million that DOE in distributing to
the State and trying to work in partnership with the state to
effectively use that money, or at least deliver it to them, and
then it's up to them. We're very happy with how that's playing
out.
So I thank you very much for this opportunity to discuss
DOE's and NREL's activities in the state, and I welcome any
questions you have.
[The prepared statement of Mr. Hirsch follows:]
Prepared Statement of Brian Hirsch, Senior Project Leader, Alaska
National Renewable Energy Laboratory, Chena Hot Springs, AK
Thank you, Senator, for this opportunity to discuss the status of
renewable energy technology and development, especially as it pertains
to rural Alaska, and the US Department of Energy's involvement in these
issues. I am Brian Hirsch, on assignment here in Alaska from the
National Renewable Energy Laboratory (NREL). NREL is the U.S.
Department of Energy's (DOE) primary National Laboratory for research
and development of renewable energy and energy efficiency technologies.
My work here is supported by the DOE's Energy Efficiency and Renewable
Energy Office, through NREL's Deployment and Industrial Partnerships
division. In recent years, DOE and NREL have been called upon to
provide ``on location'' technical support and assistance at State and
local levels, especially in locations like Alaska, where there is a
clear sense of urgency to accelerate the deployment of more efficient
and renewable energy technologies.
We face many challenges today in providing the Nation the energy it
needs while protecting our environment. These challenges are even more
difficult when we factor in the costs and complexities of meeting the
energy needs of rural and remote communities. Much work is being done
to adapt the most appropriate energy efficiency and renewable energy
technologies to serve the needs of remote areas of Alaska. My testimony
today will look at what we have been able to accomplish in this regard,
as well as challenges and opportunities for the future.
Alaska is well known for its substantial fossil fuel resources,
such as oil, gas, and coal. Alaska's renewable energy potential is less
widely recognized, but equally abundant. Over the long term, there is
tremendous potential for developing renewable energy that will support
vibrant communities, a healthy environment and a prosperous economy.
The Electric Power Research Institute (EPRI) estimates that Alaska
holds possibly 80 percent of the tidal energy potential, and 50 percent
of the wave energy potential, for the entire United States. Even just a
small portion of this energy would be sufficient to power all of
Alaska, and leave substantial excess power for export. However, there
are difficult and costly technical challenges to generating this power,
moving it to where there is demand, and storing it for when it is most
needed.
Alaska also has considerable wind energy resources. Large areas of
the State--primarily along the coasts--have Class 5 or greater wind
regimes, a designation which qualifies them as potentially attractive
sites for commercial wind power production. We know this because NREL's
Wind Powering America (WPA) program has helped to fund an anemometer
loan program and high-resolution wind resource maps, in partnership
with the State of Alaska. This research has identified over 100 remote
villages with a Class 5 or greater wind regime. NREL's WPA program has
selected Alaska as a high-priority State, and has supported ongoing
development of the Alaska Wind Working Group, through the Renewable
Energy Alaska Project (REAP).
Over the past several years, DOE Congressionally Directed Projects
have supported innovative wind-diesel hybrid initiatives in Kotzebue,
Selawik, and St. Paul Island, through utilities including Kotzebue
Electric, the Alaska Village Electric Cooperative and TDX. DOE's and
NREL's early support of these wind projects helped to answer questions
about wind turbine performance in cold weather, constructing
foundations in permafrost and integrating wind power into local
electric grids.
Because of this early and sustained effort, Alaska is now widely
recognized as a leader in wind-diesel technology. This has led to,
among other things, the establishment of the Wind-Diesel Application
Center, or WiDAC, through the University of Alaska Fairbanks' Alaska
Center for Energy and Power (ACEP). Several community-scale wind energy
projects are now in operation or under construction throughout the
State.
DOE's Tribal Energy Programs have also been quite active in
fostering renewable energy solutions for Alaskans. Support includes a
comprehensive biomass project at Fort Yukon with the Council of
Athabascan Tribal Governments, which addresses everything from diesel
fuel substitution for district heating, and eventual electricity
generation, to forest management and local business development.
Lessons learned from this initiative could be transferrable to other
communities and regions with significant biomass resources.
Other Tribal Energy Program successes include the solar
photovoltaic (PV) systems installed in Arctic Village, Venetie, and
Lime Village. These ground-breaking solar initiatives, much like the
early wind projects, are answering important questions about the
performance of these solar electric systems in the rugged Alaskan
climate.
What we learned is that solar panels can actually perform up to 15
percent better in cold weather. This is because there is less power
loss due to heat, and there is more sunlight available due to
reflection off of surrounding snow. Of course, in the dead of winter,
there is essentially no light, and thus, no power production. So while
solar power is not a complete solution for Alaska, it can be an
important contribution to the power needs of many areas, for eight or
more months a year.
In-stream hydrokinetic turbines offer significant promise given the
untapped potential of streams and rivers around the State. The Yukon
River Inter-Tribal Watershed Council, a consortium of 70 Tribes and
First Nations in Alaska and Canada, was the first to successfully
install an in-stream hydrokinetic turbine in the United States. The
system is deployed at Ruby, Alaska, in the Yukon River, and was
completed in collaboration with the Ruby Tribal Council and the City of
Ruby.
Geothermal energy could likewise play a major role in the future of
Alaska. Here at Chena Hot Springs is the lowest temperature,
electricity-producing geothermal facility in the world. This represents
an important advancement in the technology that, as it develops, could
make geothermal energy a practical alternative to many more areas of
the country that have good, though not ideal, geothermal potential.
Both Chena's initial geothermal project and its adaptation for process
water from oil and gas fields--projects being highlighted at the Energy
Fair here today--have been funded in part by DOE.
The Alaska SeaLife Center in Seward is researching the use of ocean
water as a heat source for heat pumps. This is another exciting and
innovative project that has potential for application throughout
coastal Alaska as well as other coastal areas throughout the Nation.
The Denali Commission is a longstanding supporter of rural energy
projects, including wind turbines, energy efficiency, and a new
Emerging Energy Technologies (EET) grant program. DOE's Arctic Energy
Office, which combines the resources of NREL and the National Energy
Technology Laboratory (NETL), is working closely with the Denali
Commission on a new EET grant program, funded at almost $4 million, to
select the best technology projects for rural Alaska.
One emerging opportunity lies with energy efficiency in marine
vessels. Alaska produces about 50 percent of the Nation's seafood and
is highly dependent on long-distance shipping for importing and
exporting, which adds significant costs to goods throughout the State.
New diesel engines, modern controls, and operational strategies such as
replacing hydraulics with electric motors, together have the potential
to save from 10 percent to 40 percent of total fuel use. Similarly, we
are exploring options for electric vehicles, including ATVs and snow
machines, that are commonly used in rural villages, to increase
efficiency and reduce use of fossil fuels.
Designing site- and culturally-appropriate housing is another area
where we can make great strides for energy efficiency and renewable
energy. The Cold Climate Housing Research Center, through its
Sustainable Northern Shelters program, is blending modern technology
with traditional Inupiaq design principles in the design of an
affordable net-zero energy home in Anaktuvuk Pass. While the Anaktuvuk
Pass project is unique, this work can become a model for other
residences and communities throughout Alaska and beyond.
While my testimony thus far has focused on rural areas of the
State, we have also been participating in the Railbelt Integrated
Resource Planning process, which is looking at potential renewable
energy projects with greater economies of scale. These include large
potential renewable energy developments in the Railbelt, such as
Susitna and Chakachamna hydro, Mt. Spurr geothermal, and Fire Island
wind projects. We are also supporting proposed tidal development in
Cook Inlet and Kachemak Bay.
As we prepare for energy efficiency and renewable energy-driven
economic transition, we have also begun to look at workforce
development, career and technical training potential in both rural and
urban Alaska. As we expand our work here, we must look at every turn as
to how we can nurture more green jobs in the State.
I should additionally note that DOE is closely involved in the
administration of the American Recovery and Reinvestment Act, ensuring
that funds are properly directed to the State, and that they have the
most impact, especially to help meet the clean energy needs of Alaska.
The State is in the process of receiving more than $18 million in
Weatherization funds, more than $28 million for the State Energy
Program, and almost $14 million through the Energy Efficiency and
Conservation Block Grant Program. Alaska Native Villages and Regional
Corporations are to receive an additional $12.2 million. In all, Alaska
will receive more than $72.2 million through the American Recovery and
Reinvestment Act.
Finally, DOE has shown its increased support for EERE activities in
Alaska through establishment of my current position, overseeing and
providing leadership on many of the projects discussed above.
Thank you for this opportunity to discuss the work that I, my
organization, the National Renewable Energy Laboratory, and the U.S.
Department of Energy, are doing on behalf of clean energy in Alaska.
I'd be happy to answer any questions you may have.
Senator Murkowski. Thank you, Dr. Hirsch.
Mr. Haagenson. Welcome.
STATEMENT OF STEVE HAAGENSON, EXECUTIVE DIRECTOR, ALASKA ENERGY
AUTHORITY, AND STATEWIDE ENERGY COORDINATOR, ANCHORAGE, AK
Mr. Haagenson. Thanks, Senator. Senator Murkowski and the
Democratic staff, thanks for the opportunity to talk to you
today about this interesting topic of energy. It seems to be
taking up a lot of time and a lot of interest because it's
really our survival.
But my name is Steven Haagenson, and I'm the executive
director of the Alaska Energy Authority, and also the statewide
energy coordinator. I was appointed about a year and a half ago
to look at energy and come up with an energy plan for Alaska.
As I look at Alaska, I found that we're--in knowledge, we're
truly blessed in Alaska. Along with that blessing comes a
little bit of a curse. The curse we have, which makes us
different than most every other State, are our long distances
and our low usage. A small population that can--and the long
distance to deliver energy can make almost any project
uneconomic, and it can really stress out a lot of the economics
throughout the whole industry.
So as we looked at that, we came up with a plan that would
actually address that. So we went out in Alaska and we asked
them three questions. We went out to about 28 communities in
Alaska, and we said, what resources do you know of that are
available to make energy in your backyard because you eat,
sleep, play, hunt, and fish here? The second question is, what
don't you want us to use? The third question would be, why not?
Those three questions gave us a lot of information--from
Alaskans that know more about it than we would from--as a State
perspective.
Then also--and then we said, OK, let's determine how much
energy they need. Because you need--before you start planning a
power plant or any source of energy--you need to know what your
need is. So we went through and identified the amount of energy
that was consumed across Alaska in each community and put it
into a data base. The data base also put it into perspective of
what it would cost to make those resources, if they were
available to them, and make energy out of them.
In January 2009, we issued a report called Alaska Energy, A
First Step Toward Energy Independence, and it's being used
across Alaska today. Many communities are looking at it and
using it as a resource to kind of say, well, this--I know I
have this available now, so now how can I make it real? As we
look at the study also, we went through and we developed a map.
The map of our community so we can see what resources are
available in each community. It's nice to see that there's wood
in this area, but remember the curse of distance. If it's more
than 20 miles away, you may not be able to afford to get it
there.
So we looked very specifically at every community and said,
what's in their backyard? We have a map of that. We found out,
a little bit to my surprise, that there are some places that
only have one resource. If you are looking at the lower Yukon--
down in the YK Delta, they may only have wind. There is no
other resource for them to use. If you look up in the upper
Yukon, they may only have wood. So--and there's some of the
places that have many blessings, many different resources.
But when we start thinking about what would you do if you
only had wind and we're trying to replace our electricity, our
heat, and our transportation fuels? So we said, well, let's
use--obviously use a wind turbine. So how can we make
electricity--we can make electricity very typically today.
There's some challenges on how much you can penetrate into the
system with wind-diesel coordination. So we wanted to jump past
that and go to 100 percent wind.
As we deployed the wind, that makes a lot of sense, when
the wind is blowing, you make lots of extra energy. Then we
thought of--you know, naturally I thought of Chena Hot Springs,
and we've made an artificial geothermal. The rest of the energy
would go into a big tank. We're looking at storage medium right
now. The tank would basically store hot water. That way when
the wind doesn't blow--now you have a source of hot water to
heat your community, and you would have a source of hot water
to possibly, if you wanted to, to use an ORC or a Chena Chiller
to make electricity when the wind isn't blowing.
The question is, what's the economics of that? We hired a
consultant to actually go through that, look at the
efficiencies, look at the economics, look at cost of that, and
we are working on developing that technology right now. It's in
the letter. We're looking at every community in Alaska to see
what resources they have and how we can deploy them.
We started listening to Alaskans, and we've been talking to
Alaskans about what they really want. A lot of them are just
saying, tell me what you can do now. This is not about 10 to 20
years from now. It's very tempting to get up and--you know, and
come up with a plan out there and do a--come up with a great
plan. I guess my analogy is if a person comes to you and
they're starving, you give them a few corn seeds and say here,
plant these, and by the time they grow, then you eat that, and
then you'll be fine forever. That works great as long as you
can survive until they grow.
So that's, I think, the situation that Alaska is in right
now. We need to have an immediate plan, a short-term plan, a
mid-term plan, and a long-term plan. We're developing that.
We're also adding a stretch goal or an aiming stake at coal to
say where do we want to be in the 20- to 30- to 40-year plan.
That simply put is to be 100 percent renewable for all of our
electric and all of our heat and all of our transportation. It
sounds like a lofty goal, but it's a stretch goal. I think
Alaska has the resources to do it, if we have the courage to go
down that path.
With this plan, what we'll do is develop a resource map for
each community based on the resources available to them. It
will be given to the community so they can see if that's what
they want to--if they--you know, because at the end of the day,
they need to own this. This is not about coming up with a great
plan--and we've had many brilliant plans in the past for
energy. This is about Alaskans owning the plan and wanting to
go down the path.
At the end of the day, the best plan will fail if you don't
have ownership across the State. So our next step is to go out
to Alaska and say, here's what we see from our perspective from
what we know about your resources in your backyard, then we can
deploy it, and we'd like--this is what we see, so what you--
what do you want us to do in the plan, then we'll make it
theirs.
So let's look at the--let's talk about what these steps
are. We have the immediate plan, and what can we do in the
immediate? Right now the immediate stuff is really energy
conservation and the efficiency increases, both supply and
demand side. There's a lot of things we can do on the
efficiency side. But energy efficiency and conservation are two
different things, and, you know, I'm going to take some of the
resources end of it.
Energy efficiency is something you can--it will happen
whether we think about it or not. If you buy your energy
efficient refrigerator and you plug it in and you're using it,
you don't have to think about saving energy. It's just going to
save energy. If you get compact fluorescents, you're going to
save energy. If you decide--if you walk out of here and decide
to turn the lights off, right, that's a choice. When--in Alaska
when it gets 40, 50, 60 below, people make different choices
than when it's 60 above. So you can't really rely on that. So
that's a choice. We have education needs that have to be done,
and make sure they're using energy wisely. Then we'll figure
out ways to use it more efficiently, and then we'll go down the
path.
As you see, the short-term solutions are really what we're
doing today. There's just way more of it. It's wind-diesel
applications, it's using wood that's available, it's using the
small hydrokinetic devices we can install. There's a lot of
things we can do today that are pretty much proven, mature
technologies. If you get into the mid-term, then you start
getting more risk in the technology. When you get farther out,
you get into the--it's artificial geothermal. You get into
storage conversion technologies that's risk; it's going to come
up. So it gets fuzzier.
We're going to try to give an aiming State goal so people
can go down the path to understand what their long-term future
will look like in Alaska. This report, and I'm scared to say
this, but it's--hopefully we'll have this--we have a lot of
work to do between now and then, but we're hoping to have these
out by the end of November so we can get it to Alaskans and let
people work on it and soak on it and own it. This report will
also have a concept in there for financing the plan. Because
just showing them a path doesn't help them. We need to come up
with methods that will allow them to go down the path and make
it real.
The other thing that we have is to mitigate risk. We need
to mitigate the risk because--like gaining knowledge. Right now
we have questions like how fast do willows grow? If you're
going to use willows as a resource, you better know if it's
sustainable. Is the land available? Can you--and it may be
great to have a forest. In some places if you don't have access
to land, you're sunk. So all the different technologies, you
have to understand what you're going to rely on, how it can
move forward, and we'll be developing that as best we can. But
that's when you--as you move into the future, we'll get more
information to answer those questions and identify an effective
path you want to continue down.
So remember that the aiming State concept--I'm a hunter,
you know, so we're going to aim our--so we're going to start
studying this rifle end. We're going to get it on paper first,
and we're going to analyze the bull's eye later on, but the
first step is today is a start. I think we can study this to
death. I'm not a studier, I'd rather sit there and do
something. But I think we need to make--look at our money use
wisely and spend it correctly, because we don't have unlimited
money. We need to very carefully focus our mission, get it
about right, in the right quadrant or so, and move down that
path to success.
So I'll be available for any questions at your convenience.
[The prepared statement of Mr. Haagenson follows:]
Prepared Statement of Steven Haagenson, Executive Director, Alaska
Energy Authority, and Statewide Energy Coordinator, Anchorage, AK
Chairman Bingaman, Ranking Member Murkowski and members of the
Committee, thank you for the opportunity to appear before you today.
The people of the State of Alaska are truly blessed with an
abundance of natural resources. Surrounding all these resources is a
shroud of beauty that on its worst day is breathtaking. There are vast
areas dotted with communities with beauty at every turn. From an energy
perspective, Alaska's attributes can be characterized as both blessings
and curses. We are truly blessed with abundant energy resources, and
somewhat cursed with long distances and low usages, which can strain
the economy of scales in delivery as resources are transported to their
point of use.
Alaskans have long known there are local resources that can be used
to power Alaska, but have moved toward the ease and convenience of
energy-dense hydrocarbon fuels. Each Alaskan had their own reasons for
looking for alternative fuels, some driven by rising costs, while
others identified with new phases such as sequestration or carbon-
footprint.
alaska energy
In January 2009, the Alaska Energy Authority (AEA) published a
report titled ``Alaska Energy-A first step toward energy
independence.'' This guide is now being used by communities to review
the available resources and to help them determine their least cost
energy options. The guide is available on the Alaska Energy Authority
website, www.akenergyauthority.org.
Alaska Energy--A first step toward energy independence contains two
main sections. The first section contains a 245 page narrative that
provides a statewide background on energy in Alaska, current policy and
planning efforts and issues, and discussion of the various technology
options that may be available across the State. The second document is
an 888 page technology screening tool that was developed to allow each
community to review locally available resources and determine the most
cost efficient energy options based on the delivered cost of energy to
residents.
For the first time, energy use in each community was determined for
three major components: electricity, space heating, and transportation.
In the spring and early summer of 2008, AEA engaged Alaskans
through twenty-eight town hall meetings that were held throughout the
State. Three questions were asked at these meetings: 1) What resources
do you know of near your community, where you live, play, fish and hunt
that could be used for energy? 2) What resource don't you want to see
used? and 3) Why not? AEA used this information to develop a resources
matrix for each community, showing the available energy resources.
Potential resources include hydroelectric, in-stream hydro, wind,
solar, tidal, wave, biomass, geothermal, municipal waste, natural gas,
propane, coal, diesel, coal bed methane, nuclear, and technologies for
gasification and Fischer-Tropsch liquids.
Technology teams were formed for each resource and technology to
identify available technologies that could be deployed to use the
identified resources. People with passion and expertise were brought
into the technology workgroups to help determine the most appropriate
technology. Alaska Center for Energy and Power was brought in to help
guide the technology discussion and help with the plan development.
The Technology workgroups are currently using the acquired
information on usage, resources and technologies to determine the
capital costs, and operations and maintenance costs for each
technology. The capital costs and O&M will be adjusted to each
community through the use of factors developed by HMS Construction Cost
Consultants.
The net result is a focusing tool that provides each community with
the least cost options for their electric, spacing heating and
transportation. Prices will be based on a delivered cost that includes
capital cost for infrastructure and alternative infrastructure that may
be required for alternative fuel options. Operations and Maintenance
costs and fixed energy costs were included to determine the delivered
cost of energy to the community. The delivered cost number is intended
to identify the real cost of current and alternative energy sources.
developing an alaska energy plan
A resource map was constructed that indicated the available
resources for each community. As would be expected, every resource is
not available in each community. It was a surprise, however, that even
with all the resources in Alaska, there are regions that have only one
viable local resource for fuel. For example, western Alaska communities
may only have wind, or the Upper Yukon may only have wood.
Costs for wind energy are included in the report, but in the
electric wind-diesel systems wind energy is limited to 20-30% due to
control complexity and system operations. The other observation was
that even with a 30% wind penetration, the remaining 70% of the
electrical energy would come from diesel. As Senator Murkowski knows
very well, diesel can be extremely expensive in rural Alaska, so we
searched for solutions that use 100% wind for both electric and heat.
Energy Storage and conversion become critical when intermittent
resources may be unavailable for days, months or even years. Let's look
at this further.
artificial geothermal
Wind can provide electricity and heat, but what do we do when the
wind isn't blowing? The key is to store energy when the wind blows so
it can be used at a time when the wind stops. For years, water has been
used for energy storage and transfer in geothermal applications. There
may be many storage mediums but for this discussion we will use water.
A large wind farm could provide electrical energy directly to the
distribution system with the excess electrical wind energy being input
and stored in the water tank.
When the wind stops, the hot water would provide heat and could be
used to make electricity through a binary phase turbine, similar to the
Chena Chiller Organic Rankine Cycle (ORC) generator used at Chena Hot
Springs. Stored energy could be augmented through other renewable
resources such as solar, hydrokinetic or tidal, or other fuel resources
such as diesel or wood.
storage
Storage allows the use of a resource when the need exists but the
resource may not be available.
Tidal power may require storage for a day, where wind may require
storage for weeks, and solar energy may require storage for a year.
Sizing of the storage medium is critical to ensure adequate energy is
stored and can be released when required. Energy loss, conversion
efficiencies, expected discharge durations can all affect the sizing of
the storage device.
Alaska Center for Energy and Power (ACEP) is investigating energy
storage technologies.
Tidal power is very predictable in the one-day storage duration and
would allow for smaller storage capacity. Wind would require larger
storage capacity that would be based on the mean time between wind
blows. Solar and hydrokinetic would require seasonal storage that may
be required for up to one year. Seasonal storage would have the largest
capacity and would need to store energy with minimal loss for these
long periods.
Cold Climate Housing Research Center (CCHRC) is looking at use of a
large insulated thermal mass that would be heated in the summer time
with abundant solar energy, and used as a thermal source for a heat
pump to heat buildings in the winter. There may also be opportunities
to use a heat pump to store the heat in the thermal mass in the summer
time and extract it when needed in the winter months.
energy conversion
The selection of a specific conversion technology is critical for
extracting stored energy and converting it to usable energy, but
reliability is also a critical factor. Skill levels required to operate
the overall system must be maintained. In this manner, communities can
strive to keep operations and maintenance costs at a minimum
community plans
The Alaska Energy Authority is now developing for each community a
draft plan that will deploy technologies and storage mediums for
locally available fuels. In talking to Alaskans it is clear that they
want a recommendation for today, and a technology path to follow for
the long-term. Our energy plan for each community includes:
Current resource usage levels;
Immediate (0-1 year);
Short-term (1-3 years);
Mid-term (2-10 years);
Long-term (5-15 years) and a;
Stretch Goal or aiming stake of 100% renewable energy for
our electric and heat.
We developed these community plan components in response to the
commonly heard and pressing Alaskan question, ``What can I do now?'' In
the immediate timeframe, conservation and efficiency increases are key.
Many Alaskans have already improved demand-side efficiencies by
installing compact fluorescent bulbs or participating in the Alaska
Housing Finance Corporation's weatherization program. On the supply
side, Rounds I and II of Alaska's Renewable Energy Fund are providing
$125 million to approximately 100 renewable energy projects across
Alaska.
Short-term and mid-term solutions are achieved by deploying
technologies that have short construction times, for example: wind-
diesel systems for electricity; wind-thermal systems or highly
efficient, clean burning wood stoves for heat.
Long-term solutions are achieved by using mature technologies, such
as hydroelectric, or with emerging technologies. Hydroelectric has an
extended timeframe for permitting and construction, and emerging
technologies require additional information before recommending
commercial application. It is important to begin evaluating emerging
technologies today, in order that we understand the application when
our decision to deploy is made.
Once AEA has prepared the preliminary community plans, we will
share the plans with utilities, native corporations and municipalities.
Alaskans have expressed great interest in participating in their
community plan development. Local participation is critical to the
success of energy planning. Each community and region will identify
their preferences and ultimately make the plan their own.
what we don't know
There are several areas where gaps exist in the application of
storage and conversion systems. As in all energy supplies the resource
needs to be gathered, converted into transportable energy and delivered
to the point of consumption.
More research and information is required to fill the gaps in our
existing knowledge base, such as:
Justification of a deployment philosophy;
Assessment of wind resources with on-site anemometers;
Assessment of willow resources to determine growth rates;
Determine sustainable renewable resource rates;
Assess the resource potential for wave and tidal power;
Develop technologies for capturing wave and tidal resources;
Land ownership research for access to resources;
Transition between mediums without disrupting the energy
supply;
Use of battery backup to transition between modes;
Optimize delivery systems to provide redundancy and reduce
the costs;
Evaluation of technology and storage efficiencies;
Capital cost estimates based on required sizing for
technologies;
Opportunities to reduce construction and operating costs;
Identify opportunities for in-State component construction
and assembly;
Identify opportunities for in-State operations and
maintenance personnel training;
Development of model communities to demonstrate
technologies;
Financing options.
We are currently exploring these questions at a very high level,
but more research is required before the gaps in our present knowledge
base can be filled.
putting it all together
The Alaska Energy Plan will provide direction and focus to the
vision that all Alaskans should have access to affordable power. By
making energy from locally available resources to meet local energy
needs, Alaskans will change the curses of long distance and low usage
into an expansion of our blessings.
The aiming stake approach will allow Alaskans to create a renewable
energy future on our own time frame as economic conditions allow. If
Alaska gets even half way to this stretch goal, we will be well ahead
of most States and Nations. Then, much like the North Star, we can
serve as a steady, shining guide to others undertaking the path to
energy independence.
Thank you and I would be happy to take any questions that you may
have.
Senator Murkowski. Thank you, Steve.
Let's next go to Gwen Holdmann. Welcome.
STATEMENT OF GWEN HOLDMANN, DIRECTOR, ALASKA CENTER FOR ENERGY
AND POWER, UNIVERSITY OF ALASKA, FAIRBANKS, AK
Ms. Holdmann. Thank you, Senator Murkowski and the virtual
members of the committee. I appreciate the opportunity to
appear before you today.
Senator Murkowski, I'd like to thank you personally for all
that you have done to increase focus on renewable energy
resources and the use of those resources to develop energy
projects in the State and across the country. You've put a lot
of work into this, and it is appreciated and valued. So thank
you very much.
I'd like to shift the focus a little bit about how we talk
about energy. Energy is often discussed as a means to an end,
but in actuality, energy is really a tool that we need to
obtain the goods and services that we need in our lives every
day. Stable priced energy such as what can be achieved from
renewable energy projects are needed so that current and future
Alaskans and Americans can benefit from high-paying jobs, and
so that we can continue to develop our economy, and to build
wealth for individual residents and for our State and country
as a whole.
Chena Hot Springs is a perfect example. Because it has the
geothermal power plant out here, Bernie and Connie Karl know
exactly what their energy costs are today. But also what
they're going to be 10 and 20 years from now. Those stable
prices allow them to build a business plan based on that
certainty, and that provides a lot of value to them in terms of
moving forward into that future.
Alaskans are the highest per capita energy users in the
country, in a country that is the highest per capita user of
energy in the world. That should give us pause for thought. On
average we use more energy per individual resident here than
anywhere else in the world. There are a lot of reasons for
this, and this does not mean that we are necessarily more
wasteful than other people. But the point is is that we need a
lot of energy. The cost of those energies are not necessarily
born equally by all of Alaska's residents. Each region has
particular challenges associated with it.
Because we're talking about renewables today, I'll focus on
the rural communities, and we are currently on a path right now
to spend over $4 billion in diesel fuel alone--that's not all
energy costs; that's just diesel fuel--in rural Alaska in the
next 20 years. That's a big number, and virtually all of those
dollars would go to interests based outside of our State. But
with those kinds of big numbers can also come big
opportunities.
The high-cost of energy in Alaska, and particularly rural
Alaska, make emerging technologies like distributed wind,
biomass, geothermal, and tidal energy economic to deploy today.
However, many of those technologies are more complex and
expensive to install and operate than traditional diesel
systems. Is the role of applied energy research like that
conducted through the Alaska Center for Energy and Power at the
University of Alaska to try and address the technical
challenges associated with energy projects in order to bring
the costs down and make renewable energy projects economic to
install and reliable to operate.
All energy projects are not created equal. We must be
prudent in our investment and new technologies as Mr. Haagenson
just mentioned. To this end, the university is working on
improving the efficiency of diesel engines, testing advanced
energy storage and control systems, and a variety of other
renewable energy technologies.
We're also looking at the resources to make sure that
projects that we're developing are sustainable in the long
term. We're working with Bernie right here at Chena Hot Springs
to monitor the reservoir, and to continue to work with him to
develop strategies to tweak production and injection of the hot
water that makes this place work. We're also looking at growing
willows as a biomass crop and what that would take, and doing
research needed to deploy in-river hydrokinetic turbines as
part of our energy mix.
Many of the proposed solutions we are working on are also
more broadly relevant to achieving the U.S. goals for
increasing renewables as a component of our national energy
portfolio. For example, a major challenge in dealing with the
high penetration of renewables is that a high amount of
renewables on our grids, in particular wind, effect our
electric grid infrastructure. Our grids were not designed for
fluctuating power sources, and that has become a challenge not
only in Alaska, but other parts of the country.
For this reason, Alaska has the opportunity to serve as a
model and as a proving ground for the country, and I hope that
the Senate will recognize that role that Alaska can potentially
play. As an example, we've been working with Kodiak Electric
Association on modeling the integration of hydropower wind and
diesel on their electric grid. Kodiak has a goal of 95 percent
of their electric power being produced by renewable resources
in the very near future. They are really on track to achieve
that with the first megawatt-scale wind turbine Federal turbine
installed in the State of Alaska.
When we think about this 95 percent renewables, which is
also something that Chena has achieved here, is a very lofty
goal when you consider that, as you mentioned, Senator, that in
the country only 8 percent of our power generation is from
renewable resources. We have been working with them to
determine how to reach this objective through the use of both
short- and long-term energy storage. Achieving those kinds of
high penetration is not a simple technical task, and it does
require some additional infrastructure to make that happen.
The work we're doing at Kodiak right now is very relevant
to much--the much larger national grid as certain parts of the
country are quickly ramping up installed wind power, too. The
limited grid at Kodiak affords an opportunity to optimize and
prove really high-powered models developed by Sandia National
Lab for the much more complex grid in the Lower 48 and verify
those so that we can be doing the same types of things in the
rest of the country. At a later time, testing new energy
storage options on the Kodiak grid to achieve that grid
stability will also be relevant to stabilizing the national
grid. At the University of Alaska, we've been testing the next
generation of battery technologies to meet the needs of both
Alaska and throughout the country.
The U.S. also needs to rethink Alaska's role in the context
of future global energy needs. Alaska is an exporting State,
energy exporting State. Today we export our fossil energy
resources, and those will be critical to Alaska's future for a
long time. However, we must also begin to consider how we can
develop our stranded energy sources, both fossil and renewable,
to meet growing international demand for energy.
There are ways to export energy other than through electric
power and through natural gas pipeline. That's through the
value-added processing of products and raw materials. This
presents a very real opportunity for the United States to
reshape and rethink how Alaska fits into the global energy
picture in a world that will become increasingly hungry for
cheap and stable energy prices. This is not just an economic
issue, this is also an issue of national security. As we ship
more and more of the processing of raw materials we use every
day off shore to Nations with cheaper energy than our own, we
become increasingly vulnerable to political upheaval and
instability in other regions.
We believe that it is our position that a long-range
strategy needs to be developed for optimally using Alaska's
energy resources for the benefit of both the State and the
Nation. Thank you for your time. We recognize our future energy
solutions will include a mix of renewable resources and fossil
fuels. Alaska is a critical asset to furthering a national
agenda of providing affordable and stable energy for the
country, and we believe the energy research program such as the
university's will have a key role to play in shaping that
future.
We ask you to continue to press for funding for these
critical research programs so that we can develop more
economically viable projects and continue to improve the ones
that have already been built. We would like to ask you to also
keep in mind that Alaska's particular needs sometimes differ
from those of the rest of the country, and while we have a role
to play, there can also be challenges for us to fit into some
of the funding opportunities that are out there when we're
looking at the specific issues that are needed to be addressed
up here in Alaska. Thank you for your time.
[The prepared statement of Ms. Holdmann follows:]
Prepared Statement of Gwen Holdmann, Director, Alaska Center for Energy
and Power, University of Alaska, Fairbanks, AK
Chairman Bingaman, Ranking Member Murkowski and members of the
Committee, thank you for the opportunity to appear before you today.
The U.S. is the highest per capita energy user in the world, and
Alaska has the highest per capita energy use in the country.\1\
However, these costs are not borne equally by Alaska's residents. Rural
residents spend on average 12.7% of their annual income on energy
related costs, compared to 3.6% for Anchorage and around 5%
nationwide.\2\ If we continue along the path of the status quo for
Alaska over the next 20 years, we are slated to spend $4,141,304,772 on
diesel fuel for heat and electricity in rural Alaska.\3\ When this fact
is put in the context of our patchwork of isolated grids and general
lack of infrastructure, Alaska is clearly in a singularly unique
position. In our dispersed population and limited infrastructure, we
mirror 2nd and 3rd world countries, but in our energy use we are
rivaled by no one in the developed world. Our situation is unique, and
as such the solutions we seek must be similarly unique.
---------------------------------------------------------------------------
\1\ From Energy Information Agency
\2\ Symmary: Estimated Household Costs for Home Energy Use, May
2008, ISER Publication Sharman Haley, Ben Saylor, and Nick Szymoniak
Note No. 1 Revised June 24, 2008.
\3\ Based on Alaska Energy Authority Energy Database using ISER
fuel price estimates, PCE fuel consumption values, and assuming
consumption and fuel price don't change and an interest rate of 3% over
20 years.
---------------------------------------------------------------------------
You have had the opportunity to see some of those solutions at work
here at Chena Hot Springs today. Secretary of Energy Chu had a similar
opportunity when he recently visited Bethel and Hooper Bay. After his
visit, he made the comment that Alaska could serve as a proving ground
for new energy technologies. I could not agree more with that
assessment. The high costs of energy in Alaska--particularly rural
Alaska--make emerging technologies economic to deploy today. In
addition, Alaska is grappling with the challenges associated with high
penetration of renewables, particularly wind, on our electric grid
infrastructure. Many of the proposed solutions are also more broadly
relevant to achieving the U.S. goals for increasing renewables as a
component of our national energy portfolio. For example, The Alaska
Center for Energy and Power has been working with Kodiak Electric
Association on modeling the integration of hydropower, wind, and diesel
on their electric grid. Kodiak has a goal of 95% of their electric
power being produced by renewable resources, and we are working with
them to determine how to reach this objective through the use of both
short and long term energy storage. The work we are doing at Kodiak is
also relevant to the much larger national grid as certain areas of the
country are quickly ramping up installed wind power. The limited grid
at Kodiak affords an opportunity to optimize and prove models developed
by Sandia National Lab for the much more complex grid network in the
lower-48. At a later time, testing new energy storage options on the
Kodiak grid to achieve greater grid stability will also be relevant to
stabilizing the national grid. At the University of Alaska, we have
been testing the next generation of battery technologies to meet these
needs both in Alaska and throughout the country.
In addition to this type of modeling and testing of energy storage,
The Alaska Center for Energy and Power (ACEP) at the University of
Alaska is actively engaged in research related to hydrokinetics,
biomass, wind and geothermal energy. In addition, we recognize that our
future energy mix will include a combination of fossil energy and
renewables, and as such the University is also conducting research in
optimizing existing power generation systems, and in maximizing
production of our know fossil energy resources through research in
heavy oil recovery, methane hydrates, and ultra clean coal.
Our partnerships with national energy labs are critical to
addressing these issues. On the heels of Secretary Chu's visit and
comments, we have sent the Secretary a request to develop more
collaborative relationships with the national labs with the goal of
using Alaska as a model and proving ground for the country. We welcome
DOE's recent decision to establish a permanent NREL staff position and
office in Alaska as an excellent starting point, and would like to
request that specific researchers from NREL and SNL be assigned to work
directly with the University of Alaska to address critical research
questions.
Alaska also has another key role to play on the national stage.
Alaska is an energy exporting State. Today we export our fossil energy
resources and those will be critical to Alaska's future for a long
time. However, we must also begin to consider how we can develop our
stranded energy resources--both fossil and renewable--to meet growing
international demand for energy. There are ways to export energy other
than through electric power, and that is through value added processing
of products and raw materials. Last week a report came out that
suggests the overall extent of sea ice in the arctic will continue to
decline. While the debate continues regarding climate change, we can
agree on one thing. This presents a very real opportunity for the U.S.
to reshape and rethink how Alaska fits into the global energy picture,
in a world that will become increasingly hungry for cheap and stable
energy prices. This is not just an economic issue, this is also an
issue of national security. As we ship more and more of the processing
of the raw materials we use every day offshore to Nations with cheaper
energy than our own, we become increasingly vulnerable to political
upheaval and instability in other regions. By assessing whether Alaskan
resources could be tapped to develop energy ports associated with new
potential shipping lanes, the U.S. can position Alaska as a global
energy broker and develop a strong, sustainable economy long after our
fossil energy resources begin to decline. It is our position that a
long-range strategy needs to be developed for optimally using Alaska's
energy resources for the benefit of the State and the Nation. The
Alaska Center for Energy and Power is interested in working with your
committee and appropriate Federal agencies on this issue.
Thank you for your time. We recognize that our future energy
solutions will include a mix of renewable energy and fossil fuels.
Alaska is a critical asset to furthering the national agenda of
providing affordable and stable energy for the country, and we believe
the University has a key role to play in shaping that future. It is our
hope to work more closely with your national labs and other federal
resources in addressing critical research questions necessary to
achieving that future vision for Alaska and for the country.
Senator Murkowski. Thank you, Gwen.
Chris Rose, welcome.
STATEMENT OF CHRIS ROSE, RENEWABLE ENERGY ALASKA PROJECT
(REAP), CHENA HOT SPRINGS, AK
Mr. Rose. Thank you, Senator Murkowski. Thank you, members
of the committee. I appreciate the opportunity to speak here
today. For the record, my name is Chris Rose. I'm the executive
director of the Renewable Energy Alaska Project. REAP is a
coalition of 67 organizations around the State, and also around
the country that share the goal of increasing the production of
renewable energy in the State and promoting energy efficiency.
We are composed of almost 20 utilities, over 20 businesses
and developers of renewable energy, 4 or 5 environmental
groups, consumer groups, Alaska Native organizations, and we
also have 10 local State and Federal agencies that act as
advisory members so that we can have their input at our board
meetings and in the work we do. We're an education and advocacy
group. We do things like put on forums, renewable energy fairs,
conferences, put together, along with the Alaska Energy
Authority, the Renewable Energy Atlas of Alaska, which we have
now printed and distributed almost 25,000 of over the last 3
years. So those are the kinds of things we do, and we really
focus on statewide issues, and so I appreciate the opportunity
to talk about the Federal issues, but just keep in mind that we
really focused a lot on the State things that are happening
here.
As many of the other members, the other witnesses have
stated, we have some of the best renewable energy resources in
the world, and you said that yourself, Senator. You went
through the list. We do have some of the, and fortunately or
not we've had so much oil and gas in this State that we've, I
think, ignored our renewable energy resources up until
relatively recently. They've just been in the background,
because we haven't necessarily needed them, although we have
been using our hydro resources for quite some time.
We do have this huge opportunity now to seize, both here in
the State and also at a national level. The way that we frame
this issue of renewable energy when we're out there talking to
people is in terms of risk management. Because there are lots
of risks, and continuing on the status quo. The first one is
already hitting us, and that's price. Worldwide energy demand
is expected to double by the year 2050 and quadruple by the
year 2100.
We're looking at places like India and China where
everybody wants to drive a car, everybody wants to have the
same kind of lifestyle that we have. If everybody in China used
the same amount of oil per capita as Americans, Chinese today
would use every drop of oil that's produced, and there would
not be anything for the Europeans or the Americans or anybody
else.
So we're facing a future where worldwide demand for energy
is increasing quite rapidly. At the same time, the fossil fuels
that we have really built our civilization on are a finite
resource. So they're diminishing, so price is going to go up.
It's going to trend up, and that's a real risk if we don't
diversify our portfolio and put in flat-price renewable energy
resources, and that's, I think, what Gwen and other people are
talking about, is we can predict the price of these renewable
energy resources, and that is a huge boon for investors and for
the business community.
Of course, another big risk is climate change. I included
in the testimony that I--the written testimony, a small article
that I pulled off the Internet just 2 days ago about some
research that's just been done here in Fairbanks, the
University of Alaska Fairbanks, about ocean acidification,
which I think is probably the biggest concern we have right now
in terms of the short term. Right now we're looking at a
situation where pteropods and other small creatures are unable
to form shells because of the increasing carbonic acid
concentrations in the ocean. Of course, that could really
impact our fishing industry.
But the biggest insurance companies in the world see this
and an economic issue. They're the ones who are paying for
these climactic events that are occurring around this country
and around the world. So another driver, and that's what's
driving us toward carbon regulation, which is going to cause
the price of fossil fuels to go even higher.
I think that one of the biggest risks is that this is $150
billion a year business right now, and most of that business is
happening elsewhere, not in the United States. It's expected to
quadruple by the year 2015. We have this huge opportunity here
to be a part of that clean energy revolution. A lot of people
are looking at this as the next industrial revolution, and, in
fact, it has to be, because energy is the lifeblood of any
economy. We can't do anything, we can't grow food, we can't
transport ourselves, we can run businesses without energy. So
we're talking heat transportation and electricity.
As Gwen and others have pointed out, we've got this testing
bed in rural Alaska, whether we recognize it or not. When you
can produce hydrokinetic energy, for instance, at 50 cents a
kilowatt hour, which is demonstration technology, that's not
going to really save anybody money in the Lower 48. That saves
people money today in Alaska. So this is the perfect place to
be testing these kinds of things that are relatively expensive,
with 90 percent of the tidal and 50 percent of the wave energy
and all this geothermal and wind, we should be leaders in this
technology.
There's 2 billion people on the planet right now with no
electricity. That's almost a third of the world. That's a huge
market. All those people wanted electricity yesterday. If we
can perfect these technologies like wind-diesel hybrid systems
and hydrokinetics and solar, we can then be exporting that
technology around the world. So we have this huge opportunity
that we see.
Solar, for instance, is one thing that's really exciting
for me. It really hasn't taken off in Alaska because it doesn't
follow our load. We don't use a lot of air conditioning, we
don't have a lot of lighting in the summer, and yet, when plug-
in hybrids come in next year, I'll be buying one of those cars,
I'll be putting solar panels on my house, and I'll be running
my car off of solar. So when you start applying solar to
transportation, all of a sudden the whole game changes in terms
of how we might be able to use that.
So with hydro, solar, all these other opportunities up
here, we clearly have a huge opportunity for Alaska. I just
want to hit a few Federal policies, and like I said, we're
not--we're not concentrated on those, but there are a few
Federal policies that are important to mention right now.
There's a Renewable Electricity Standard that's in front of
Congress. One thing that the REAP board has talked about quite
extensively at one of our board meetings is the definition of
hydro. Right now--and I know you've been working very hard on
this, Senator--I think the Lower 48 sees hydro as something
that has been kind of past its life, and also is a--can be of
concern to fish. Of course, we're concerned about fish up here,
too. But we have many, many hydroprojects or possibilities up
here that the Lower 48 doesn't have. So if there's an RES and a
renewable electricity credit market, we want to make sure that
our hydroprojects get those RECs.
Also, regarding RECs, we want to make sure that any policy
that is formed at the Federal level for renewable electricity
as standard does not squash inadvertently the voluntary REC
market. Because the voluntary REC market right now is really
helping renewable energy grow. So we want to make sure there's
no double counting, and that if there's voluntary RECs out
there, that they're not used for compliance. We also want to
make sure that if there are RECs that are sold before an RES is
actually instituted, that the--those RECs vest in the purchaser
and not the entity that produced the power. Because otherwise
if we don't do that, it can inadvertently squash that voluntary
REC market.
The Clean Renewable Energy Bonds have been a really
fantastic program. Kodiak Electric, which has been mentioned
here several times, used those bonds. They're one of the first
entities in Alaska to really use those successfully. That
program should be expanded, and maybe more various types of
projects could be included in that program.
I just had a meeting with John Goll, who's the regional
director of MMS the other day, and we were talking about a
forum maybe later in the fall about the new MMS leasing
program. That's something we really have to look at very
closely, because any offshore wind industry, hydrokinetic
industry that's going to be evolving offshore could really be
hurt if this program is not setup correctly.
Right now I think MMS is in a difficult position to figure
out how to actually evaluate those resources. Because for one
thing we don't have a lot of baseline information about what
the resources are, and I think there might be an inherent
conflict in extracting revenue through those leases, and at the
same time having policies like the Federal Product Tax Credit
that are actually rewarding and incentivizing renewable energy.
So there's a little tension there between those two, and
especially with hydrokinetics and offshore wind which are
nascent industries. We really want to make them get off the
ground and grow. We don't want to hold them back, but we're
really pleased overall that FREC and MMS have resolved the
jurisdictional conflict over that issue.
Twenty percent wind. DOE has had a 20 percent wind goal now
for about 2 years. There's a very extensive report. As Brian
Hirsch pointed out, NREL's been working on this. The Wind
Powering America program, which is part of NREL has been
working--we've been working very closely with them over the
years. That's a very important program to educate people about
wind.
There's no doubt technologically and physically that we can
do 20 percent wind by 2030 in this country. But there's going
to be a lot more transmission, there's going to be a lot more
education that's going to have to precede that, and so we're
really looking at DOE's goal of 20 percent wind as a doable
goal. We would like to see as many resources put into that as
possible, because that is the most mature and commercially
viable of all the new renewable energy resources past hydro.
Forty-two percent of all installed new electrical capacity in
the United States last year was wind. So it's a very, very
fast-growing industry.
On the issue of job training, research and development,
there's a lot to do there. We're going to have to prepare all
our workers, and we're going to have to really be leaders in
this. The things that Gwen's doing at the Alaska Center of
Energy and Power could really have world ramifications if we
can provide--if we can get better storage, if we can really
work on these wind-diesel hybrid systems, if we can perfect
hydrokinetics. We have this opportunity here in Alaska to help
not only the United States, but also the world.
I guess I would just close with the discussion of vision,
and that is--and on the State level working on the same thing,
which is we need an overall vision and policy about where we're
going. Without that vision and where we're going in 100 years,
we're not going to be able to draw the road map to see how
we're going to get there. But the fact is that we're probably
going to run out of fossil fuels sometime in the next 100
years, or at least they're going to become so expensive it's
going to be difficult to use them.
So where are we going to go? How are we going to get to a
place where we are 100 percent renewable like Steve Haagenson
says? It's the economies and it's the cultures and the
societies in this world that see that like Iceland, like Brazil
and other places that have that vision that are going to be the
most economically competitive, and the ones that are going to
prosper. So we're really hoping that Congress can look 50, 60,
70 years down the road for the United States and say, how are
we going to get there? Because we have tremendous renewable
energy resources in this country, and especially in Alaska.
I think it's crazy in some ways in Alaska that we're
looking at exporting this natural gas that we have that for
Alaskans could last 1,000 years. But if we pipe it to Chicago,
we'll run out of it in the same time the Chicagoans run out of
it. So we got to think about ways that we're going to be able
to preserve some of our resources here in Alaska and the United
States, our fossil reserves, and at the same time really push
hard on the renewables. We really do appreciate all the work
that you've been doing on this, Senator Murkowski. Thank you
very much. Thank you for the opportunity to testify.
[The prepared statement of Mr. Rose follows:]
Prepared Statement of Chris Rose, Renewable Energy Alaska Project
(REAP), Chena Hot Springs, AK
Members of the Committee, for the record my name is Chris Rose and
I am the Executive Director of the Renewable Energy Alaska Project,
also known as REAP. Thank you very much for the opportunity to testify
at this hearing.
After introducing REAP I would like to describe how REAP approaches
the issue of renewable energy, then briefly touch on some federal
issues that impact renewable energy development.
REAP is a coalition of 67 entities, including organizational
members consisting of Alaska electric utilities, businesses,
environmental and consumer groups and Alaska Native organizations that
share the goal of increasing the production of renewable energy in
Alaska and promoting energy efficiency. Besides those members REAP also
includes local, State Federal Agencies and institutions that also have
an interest in renewable energy. Examples of those Advisory members are
the Alaska Energy Authority, the Alaska Center for Energy and Power,
the Denali Commission the National Renewable Energy Laboratory (NREL).
Over the last 5 years REAP's work has primarily focused on the
State level. As an education and advocacy group we have five primary
objectives which are to:
1) promote energy efficiency;
2) foster and promote stakeholder unity in support of
renewable energy;
3) work to get viable renewable energy projects in the
ground;
4) work to implement policies that promote more renewable
energy and;
5) build a market for renewable energy in Alaska.
Each year REAP hosts several events, including the annual Alaska
Renewable Energy Fair, the Business of Clean Energy in Alaska
conference and numerous forums on renewable energy and energy
efficiency.
At the State level we have worked hard to educate policy makers
about the benefits of renewable energy and energy efficiency. Besides
several bills that are now pending in the Alaska legislature, our work
has resulted in the creation of the Alaska Renewable Energy Grant Fund
into which the legislature has appropriated $125 million over the last
18 months for over 100 renewable energy projects across Alaska. It is
one of the largest clean energy funds in the Nation, and represents the
highest per capita spending on renewable energy in the United States.
renewable energy as risk management
REAP sees the issue of renewable energy in the context of risk
management. The risk is continuing to rely on the status quo for our
energy, with its heavy reliance on fossil fuels.
The first risk is affecting us already, and that is price. World
energy demand is expected to double by 2050, and quadruple by 2100.
Meanwhile the fossil fuels that have built our economy are finite
resources that are diminishing. The laws of supply and demand are
pushing fossil fuel prices higher, especially in places like rural
Alaska where diesel, heating oil and gasoline prices are significantly
higher than in the rest of the country. As we move into the 21st
century and Nations like China and India develop economies with higher
per capita energy use, the price of fossil fuels will go even higher.
However, with renewable energy the ``fuel'' is free, whether it is
wind, sun or flowing water, resulting in the generation of flat-priced
power.
A second and related risk is geopolitical. Many would argue that we
are already suffering from the fact that roughly 65% of the world's
proven and conventional oil reserves are in five countries in the
Middle East: Saudi Arabia, Kuwait, Iran, Iraq, and the United Arab
Emirates. Increasingly, the entire world is competing for this
relatively inexpensive oil that lies in an area of the world where the
United States' access is getting more and more difficult to obtain.
Renewable energy is local and inexhaustible energy.
A third risk is climate change. With each of its successive reports
the Intergovernmental Panel on Climate Change (IPCC) has concluded
there is an increasing chance it is we humans and our carbon emissions
that are causing climate change. Even without conclusive proof of the
cause, it is clear that climate changes are occurring much more quickly
than scientists have been able to predict, and that we must do
something about it.
Perhaps the most disturbing change that we are facing is the
buildup of carbonic acid in the oceans that is rapidly changing their
chemistry. As reported by The Daily Climate on August 20, 2009, by some
estimates the oceans have absorbed 30% of the carbon dioxide emitted
since the beginning of the industrial revolution. The ocean's pH has
dropped nearly 30 percent over the past 250 years to levels not seen in
800,000 years, and if emissions continue unchecked in 40 years, the
oceans could be more acidic than anything experienced in the past 12
million years, according to some climate models.
According to The Daily Climate story, as ocean pH drops and acidity
rises, organisms such as corals, oysters, clams and crabs have trouble
pulling from seawater the minerals to create protective shells. New
research from the University of Alaska Fairbanks suggests Arctic oceans
are particularly susceptible to acidification because cold water
absorbs more carbon dioxide than warmer water. The newest data from the
Gulf of Alaska shows that acidity levels far higher than expected might
already be impacting the food web. In several sites the increasing
acidity has changed ocean chemistry so significantly that the pterapods
at the base of the food web that support the state's salmon runs are
unable to form shells. According to Jeremy Mathis at the University of
Alaska Fairbanks, ``[t]he increasing acidification of Alaska waters
could have a destructive effect on all of our commercial fisheries.
This is a problem that we have to think about in terms of the next
decade instead of the next century.'' For this and many other reasons,
scientists and Nations around the world are looking for ways to decease
carbon emissions. Renewable energy does not emit carbon dioxide when it
is generated.
The last risk is a business risk. The clean energy industry is
estimated to be about a $150 billion business this year, and it is
expected to at least quadruple by 2015. One example of this growth is
the wind industry, which has been the world's fastest growing energy
sector for over a decade. Last year 42% of all new electrical
generation installed in the United States was wind. The risk is that
the United States and states like Alaska will largely miss out on what
many believe will be the next industrial revolution. For example, today
General Electric is the only American company that ranks in the top ten
of wind turbine manufacturers. If the United States is to remain
competitive in an increasingly competitive world, we must anticipate
trends like carbon regulation and the desire by business and industry
to have access to predictably priced and local power.
In Alaska we have a unique opportunity to be part of the new clean
energy economy that is coming our way. We need to recognize that
village Alaska can be a laboratory for energy innovation. Only in rural
Alaska, where electricity rates often exceed $1/kWh, can a
demonstration project that produces 50 cent/kWh actually save residents
money at the same time that a technology is tried. Alaska is already
seen as a world leader in wind-diesel hybrid technology, and Kodiak
Electric Association just installed the first wind-diesel-hydro hybrid
project in North America. There are currently over two billion people
in the world with no electricity at all, many of whom live in remote
villages in the developing world that will likely leap frog the
standard central power station model straight to distributed energy
systems like the ones we are developing in remote Alaskan communities.
If we can perfect those systems in Alaska, the state has the
opportunity to export that technology and know-how across the planet.
federal policy issues
Because REAP is primarily focused on State issues, our 21 member
board of directors has not yet taken an official position on most
federal energy policy. However, I will make some brief comments on a
few issues.
national renewable electricity standard (res)
The RES is the only federal policy that the REAP board of directors
has taken up and voted to support, with certain provisions. Because SB
433, as drafted last spring, would exempt Alaska utilities because of
their small size, REAP supported it because Alaska entities could still
take part in the Renewable Energy Credit (REC) market that it would
create. The provisions that would given extra credits for renewable
energy produced on tribal lands was particularly supported, as long as
it did not apply to electrical grids of less than 10 MW. This exclusion
was something that small village utilities in particular believe is
important to prevent independent power producers (IPPs) from coming
into a village and competing with small village utilities that are
already in fragile economic States.
The other provision of interest to REAP members in any RES is the
definition of hydroelectric power as renewable energy. REAP believes
that properly permitted hydroelectric power in Alaska should count as
renewable energy for purposes of the REC market that would be created.
Alaska has many potential hydro locations that have not been developed,
and Alaskans will be the first to scrutinize any impacts that a hydro
facility will have on fish.
federal production tax credit
REAP is pleased with the recent extension of the federal production
tax credit (PTC). It remains to be seen what shape the various
renewable energy industries will be in 2012, but it is likely that many
of them, including tidal, wave and solar, will need another, longer
term extension of the PTC. It is very difficult for U.S. markets to
compete in the renewable energy space with countries in Europe, several
of which provide 20-year market certainty with feed-in tariffs.
clean renewable energy bonds (crebs)
CREBs have already helped Kodiak Electric Association build the
largest wind farm in the Alaska. The program should be expanded, and
perhaps restructured to fund a greater variety of projects.
the rec market
Currently, many organizations, households, government agencies,
farms, and businesses voluntarily purchase ``green power'' in the form
of renewable energy certificates (RECs), or install on-site renewable
electricity generation like solar as part of their commitment to
reducing their global warming footprint. The voluntary market has been
an important driver of clean energy development across the United
States, responsible for millions of dollars in new investment. The
voluntary market grew by 62% in 2004, 37% in 2005, 41% in 2006, and 53%
in 2007. If the voluntary market continues to grow at an annual rate of
40% (based on recent experience), it will reach nearly 50 million MWh
by 2010.
The Senate RES provisions of American Clean Energy and Security Act
(ACESA) should be amended so that the Act does not inadvertently
undercut the thriving voluntary renewable energy market. Specifically,
the amendments should 1) expressly prohibit voluntary renewable
purchases to be used toward RES compliance and 2) clarify federal
renewable energy certificate (FREC) ownership for contracts involving
unbundled RECs created prior to enactment.
It is an essential principle that double counting of claims be
disallowed. Either a voluntary or a compliance claim can be made for
each MWh of clean energy sold, not both. To prevent double counting,
ownership of and rights to Federal RECs should be clear. When a
renewable generator has sold electricity and/or renewable energy
credits, certificates or attributes associated with such generation
under a contract that was entered into before the date of enactment of
the federal RES, ownership of the Federal renewable electricity credits
associated with such generation should vest in the party that purchased
the renewable energy certificates. This clarification of ownership
rights to federal RECs will provide essential market certainty
necessary to maintain a thriving voluntary renewable energy market.
Unless addressed this issue would not only seriously undercut
voluntary green power marketers, but could also compromise the
standard's fundamental goal of increasing renewable energy deployment,
since voluntary purchases have been major drivers of such growth.
20% wind by 2030
A great deal of work at the federal level is necessary to reach the
DOE's stated goal of 20% wind by 2030. The DOE has produced a
comprehensive report on this goal. However, outreach efforts, like
those led by NREL's Wind Powering America (WPA) program, need to be
strengthened. WPA has supported REAP in its outreach efforts in Alaska,
and has selected Alaska as one of its 13 priority States. As such, WPA
has worked aggressively with REAP and the Alaska Energy Authority (AEA)
to share the development of a high resolution wind map of the State to
identify the quality of wind resources along the Railbelt as well as
the hub and remote communities. Additionally, WPA funded the anemometer
loan program to prospect for wind in rural communities.
NREL, AEA and REAP held the international wind-diesel conference in
Alaska in 2008 in recognition of both the progress and need for a
robust wind-diesel market in Alaska villages. The cost-shared early
wind-diesel pilot projects in Wales and Selawik developed many lessons
learned that were incorporated in successful commercial projects in
other AVEC villages. The cooperation on the emerging wind-diesel
research center at UAF will be important in training new engineers in
the controls and design challenges remote electricity systems.
WPA has been effective across the country in helping to educate the
public and policy makers that wind is a mature and commercially
competitive technology. While wind currently provides just over 1% of
the Nation's electricity today, it is clear that the 20% goal is
achievable when one looks at countries like Denmark which is already
20% wind electricity. Iowa currently leads the United States, at 15%
wind.
mms and offshore leasing
REAP is pleased that Interior Secretary Salazar has recently helped
resolve the jurisdictional dispute over hydroelectric and hydrokinetic
resources that existed between the Minerals Management Service (MMS)
and the Federal Energy Regulatory Commission (FERC). However, the
leasing system that Congress has now asked MMS to develop for renewable
energy resources more than three miles offshore sets up some real
challenges for the agency in how to evaluate those resources during the
leasing process. It is going to be very difficult to value offshore
wind and hydrokinetic (tidal and wave) resources without more baseline
information about those resources. Furthermore, too high a leasing
price could effectively kill the nascent and currently undercapitalized
offshore wind and hydrokinetic industries before they have a chance to
get off the ground. There also seems to be an inherent conflict between
the federal production tax credit that is designed to incentivize
renewable energy development, and a leasing system that is designed to
extract revenue from renewable energy developers.
research and development
As already alluded to, the United States trails behind Europe,
Japan, and many other Nations in the development of clean energy
technology. In order to catch up and become a leader in this incredibly
important field, the United States must help fund research, development
and deployment of new technologies. As noted, Alaska is a perfect place
to test technologies because we can save people money at the same time
we demonstrate technology. With over 90% of the Nation's tidal energy
potential, 50% of the Nation's wave energy potential and incredible
wind, geothermal, biomass and solar resources, Alaska should be a
leader in renewable energy development. Such development should extend
beyond electricity to heat and transportation. Today heating bills in
rural Alaska are more of a problem than electric bills. Communities in
Southeast Alaska which have excess hydroelectric capacity and short
road systems are perfect to demonstrate how an all-electric
transportation system could work. More electric transportation should
also be considered in Alaska's Railbelt, where today large hydro
projects are being considered and citizens are exporting hundreds of
millions of dollars outside the State each year to purchase gasoline.
With plug-in hybrid automobiles on the near horizon, Alaska should also
be working to utilize our excellent summer solar resources to save on
fuel from March through October.
In the area of hydrokinetic energy, the federal government should
consider helping to fund basic environmental research to study the
technology's possible impacts on marine life. The cost of that research
is now being borne by a nascent industry that is having trouble paying
for it. Other Nations, like Canada, are cost sharing in this research,
making them more attractive places for tidal and wave energy companies
to do business.
job training
In order for the United States to be ready for the energy
challenges ahead we must train our workforce. Renewable energy and
energy efficiency will create jobs and help the United States compete
in the world economy. Federal grants to States and institutions of
higher learning to establish workforce development programs will help
accelerate the clean energy economy in the United States.
carbon regulation
As already noted, the REAP board of directors has not taken any
position on the various proposals to set up a cap-and-trade program or
carbon tax. However, it is clear that economic price signals do often
work, and the more expensive a commodity is, the less demand for it is
created. Higher prices for one commodity also give space to competitors
selling another. In the case of carbon, it seems likely that carbon
regulation will help promote the development of more renewable energy.
Establishing a price on carbon would also recognize its true costs, and
discourage a simple reliance on the status quo. Depending on what
legislation might be passed, it is likely that money would flow to the
State of Alaska in the form of emission allowances that the State could
use to further promote renewable energy and energy efficiency.
conclusion
The federal government's role in expanding the clean energy economy
in the United States and in Alaska is pivotal. Energy is the lifeblood
of our economy. Unless we aggressively seek ways to increase the
percentage of clean, local and stably-priced renewable energy in the
Nation's portfolio, the country will become increasingly uncompetitive
with other Nations and economies that are anticipating that supply and
demand of finite fossil fuels and concerns about climate change are
going to continue to make fossil fuels more expensive in the future.
Because energy is such a huge and important area, and because of
the limited time that I have had to prepare for this testimony, it
cannot be exhaustive. However, REAP appreciates the opportunity to
testify, and looks forward to working with the Committee in any way
possible in the future. Thank you.
Senator Murkowski. Thank you. Thank all of you for your
testimony this morning. It's been very interesting, good
discussion, and I think a very important part of our committee
records. So I thank you for that. I've got several questions
that I'm going to ask of you, and probably submit a lot more to
you as your homework, and we'll include that as part of the
record, but in the interest of moving through the panel to the
second panel today, I'll let you off the hot seat on some of
it.
I want to acknowledge a few of our State leaders that have
joined us since the initial introduction. We've got Senator
Therriault in the back. I see Senator Bob--or excuse me,
Representative Bob Herron back there as well. Representative
Dahlstrom, Representative Charisse Millett. I think that's all
that I've seen. Who else? Representative John Coghill. So
welcome to all of you, and thank you for your leadership on
energy interests. Representative Jay Ramras is in the back as
well, so pleased to have you all here. Who else am I missing.
Audience Member: Senator Thomas--I mean, Paskvan. Senator
Paskvan.
Senator Murkowski. Senator Paskvan right back there. OK.
Who else is back there. Thank you for joining us, and for your
leadership at the State level on these issues. I know that
there has been more than a few energy field trips this summer
for our legislators, and I think that that's a very important
part of what we're doing here at the State.
I want to ask a question. We're here at Chena Hot Springs,
where you have one guy, basically, with a vision and a plan and
a sense of energy that made good things happen, and he got a
little bit of help from a DOE grant at the outset. But a lot of
this was shoestring stuff and just really believing in the
potential of what we have here.
So much of what happens from a policy perspective back in
Washington, DC, is we've got a tendency, through our policies,
inadvertent or not, to pick winners and losers when it comes to
energy and how we advance it. Chris, you suggested that, you
know, wind is one that we've seen real advances, and we can
meet that goal. I think part of that is because we've really
put those Federal dollars and those grant opportunities toward
wind. But they look at geothermal, for instance. When I say
they, I mean the Department of Energy and others at the Federal
Government. They look at geothermal and say, well, that's a
mature technology. As a mature technology, you don't fit into
these nice, neat opportunities where you can get these
emergency--excuse me, emerging energy technology grants.
So you've got something going on here at Chena Hot Springs
that what we're dealing with is not mature technology, it is a
completely different process. It would qualify as emerging, but
we've decided that we're going to go with those more proven
technologies. Steve, I think you mentioned that in your
assessment statewide of what potential is out there, we got a
lot of everything throughout the whole State, but in some areas
you just have wind, or you just have biomass. So through our
initiatives and how we direct grant funding, to a certain
extent, we're kind of defining what's going to be good and
what's going to be bad, and it may not be what works best in
the YK Delta. It may not be what works best in Southeast.
So help me out a little, and I'll start with you, Mr.
Hirsch, when we're talking about how we advance, meaningfully
advance some of these more cutting edge energy vision--
visioning things, how do we do it so that it's more than just a
pilot project that gets a little bit of funding and you get
some interest, but it doesn't have any follow through in terms
of the funding to really put this in the ground and make a
difference?
Mr. Hirsch. Thank you. It's a really excellent point, and a
very insightful question to add. It's something I personally
have been wrestling with for many years, and it's primarily our
developer and the contractor prior to my recent appointment
here at NREL. Something I mentioned briefly earlier as far as
some of the projects I've been working on that are very small
scale. There's several approaches, I think. From the government
perspective, what seems to make sense is nobody wants to fund a
loser. So there is a challenge about putting a lot of money
into something that doesn't work very well. We all know that
anytime even when you fund a grant, there's a risk that they're
not going to perform the way it's presented. So what I've seen
happening, what I've actually personally been promoting a lot,
is this sense of this emerging energy technologies.
My sense of it in Alaska, more than almost anywhere else,
has these challenges that we have that are more difficult--and
that we can benefit most greatly from. Around, for example,
this tidal and wave energy. We have so much energy that we
don't quite know how to handle it even if we were to get it. So
I think what we need to do is have a multi-tiered approach.
Understandably, for example, the Alaska Renewable Energy Fund
at State level that AEA is overseeing excellently. That's
really for commercial, off-the-shelf proven technology. That's
the focus on reducing power costs with things that we know.
At the same time, and what several of us have been pushing
for, Chris Rose, all of us really, have been identifying this
need for this emerging energy technologies fund where it's--and
there, you know, pretty strict definition where the concept
makes a lot of sense. It's something that's 3 to 5 years out
roughly for developing this technology to the point where it
could become commercial. It's proving grounds.
So Denali Commission has taken the first step in funding
some of their own money, putting their skin in the game to
develop that--to essentially gamble on high risk, but
potentially very high payoff-type projects. Looking at some of
the energy storage issues around anhydrous ammonia that you
mentioned in your initial discussion, as well as energy storage
around wind to really increase the high-penetration rates.
Then we're working on a State level--or many people are
working on a State level mirror image of this emerging energy
technologies fund for--similar to the Renewable Energy Fund
that the State is doing to--and it's probably not going to be
as much money, and it will have very targeted projects. It's
a--this could be a game changer. That's, I think, really what
we're looking for at this stage. At the same time, we have to,
I think, believe, to some degree, in the American history of
innovation and really--what I've seen is a real opening of
peoples' ideas. It used to be you talked about solar thermal in
Alaska, and people laughed you out of the room. Now they're
serious about this heat pump in Seward, and Chena Hot Springs
here is distributing vacuum tubes with solar thermal that a few
years ago you would be--you wouldn't be taken seriously.
So a lot of it has to do with hearings, such as what you're
holding here and the attention from the national level and the
real education that policymakers--I've seen an incredible
increase of policymakers' understanding of these issues. So
everybody who's getting involved really ought to be commended.
I think together we're working through those solutions, but
they're absolute difficulties. So thank you.
Senator Murkowski. I appreciate your perspective on that. I
will, I guess, ask for your encouragement within the
administration. As you know, back in 2007, we were successful
in including within the Energy Independence and Security Act a
provision that allows for the authorization of renewable energy
deployment grants here in Alaska where the Federal Government
kicks in and helps with matching funds there for construction
of some of these projects. Authorization is good. It's
absolutely important, it's necessary, but we'd sure like to
make sure that there is support within the president's budget
to allow for the funding to go forward.
Because I think all of you have discussed, in one way or a
shape or a form that the vision is good, but we've got to have
the financial aid, whether it's at the State, local, or Federal
level to help facilitate. So we appreciate your encouragement.
I don't know whether you can speak for Secretary Chu, but if
you can and you can give me the affirmative answer now, I'd
really appreciate it.
Mr. Hirsch. I'd only do that once, and then that would be
over.
Senator Murkowski. Yes, yes, yes. OK. We don't want to put
you in that----
Mr. Hirsch. Just very briefly there, you mentioned this
geothermal situation, for example, where it wasn't viewed as a
mature technology. Just this year there's been a new
understanding of that, and there has been a recent solicitation
on what they call enhanced geothermal systems where there was
exactly that issue where they realized all of the technologies
around geothermal are not mature. There has been new funding
for that. Similarly with hydropower where it's been recognized
as mature. Just this month, I believe, there was a solicitation
that came out on upgrading hydropower facilities that already
exist. So there's a beginning recognition of what you're
talking about, but more of this discussion will absolutely
help.
Senator Murkowski. I want to ask a question, and I'll throw
it out to any of you. When we talk about the technologies that
are out there, whether it's for wind or solar panels or
anything else that we might be doing, we recognize that our
climate up here, our environment adds some difficulties or some
challenges. Steve, you mentioned the fact that the solar panels
actually enhance the energy efficiency if it's cold. That's
something that I didn't know.
How much more of a challenge is it operating in an Arctic
environment when we're talking about our renewable energy
sources? I know that, for instance, with the wind turbines,
what we have up north has to be a little bit different than
what they're utilizing down there in California. How unique is
our market in terms of the technologies, and how much more do
we have to refine them in order for them to really--to work
well here?
Mr. Haagenson. Senator, I think Alaska's always different,
right?
Senator Murkowski. Always different.
Mr. Haagenson. That's the----
Senator Murkowski. We tell everybody, but they don't
believe it, so they come up here.
Mr. Haagenson. So starting at that point, I think we do
have some different challenges up here. I think one of the
things we--like right now we have a lot of energy, right? In
the wintertime we don't. Like Chris mentioned, they don't peak
at the same times we need them. So I think that one of the
things that we need to look at is storage, right. If we can
solve this problem in storing energy for a day for tidal, for a
month for wind, or for a year for solar or hydrokinetic or
something like that, if we can solve that problem, we can
deploy it anyplace in the world. Because this is one of the
toughest environments to operate in.
Senator Murkowski. You actually mentioned in your comments
that--I think you said we are working on developing that
storage technology now. Who--can you give me a little more
detail on that?
Mr. Haagenson. Yes, I can. We've hired a consultant, WH
Pacific, to actually take that concept and make it real and
find out if we have any operating deficiencies, the storage,
the size it would take, the costing effort. HMS is helping us
come up with a cost estimate. Then we'll deploy that out to
every community, you know, in our big model. So we'll see it as
part of the costs, to see what the best operating options would
be.
So we're developing that. We're looking at one other thing.
I was talking to a friend of mine at the Cold Climate Housing
Center the other day, and we said we're going to put a heat
pump at Weller School. In my days in Fairbanks, I remember that
the ground is about 38 degrees, and you're trying to take it to
38-32 degrees and it's going to stop working. He said, well,
what we want to do is we want to put thermal cells in--I mean,
thermal cells, not the portable tape, but thermal and heat--
solar cells, and we're going to collect, you know, a big slab
of concrete in Weller School parking lot, we're going to
insulate that slab, and we're going to just take that slab up
to about 190 degrees, say, and then in the wintertime, it'll be
hot, we'll then put a heat pump on that and take it from 190
down to 32. So and they're thinking they can get a lot of
energy out of that slab.
Again, it's a storage technology. So there's a lot of
challenges here, but I think--and I'm going to go back to your
first question that--about the first answer, I think what we
need is passion, OK, in Alaska. If you think about Bernie for a
second, I don't know how many of you have had the pleasure of
saying no to Bernie.
Senator Murkowski. It doesn't work.
Mr. Haagenson. It doesn't work, right. So why is that?
Because he's passionate. He's the most passionate guy I know.
You tell him no, and he's going to tell you the five reasons
why you can't say no. He's going to go forward without you. So
we need more Alaskans like Bernie. I'm saying that with a
little hesitation. We need more Alaskans with passion like
Bernie. Nothing personal, Bernie.
Senator Murkowski. We all understand.
Mr. Haagenson. Thanks. So I mean, that's--and that's not a
question do you have passion, you don't want unbridled passion,
but you need to--now the question is how do you handle risk.
Like Dr. Hirsch mentioned, you don't--you know, you don't want
to reward failure. You don't want a bad budget, but the
question is how can you fund things like that, and who should
fund it until you make the next step? Because a lot of
breakthrough technologies need risk. Bernie took risk. He--you
know, he was told many times that wouldn't work, it's too cold.
One man told him that over and over again. He went and found a
solution, and they're wishing that they would have listened to
him one today.
So how do you encourage risk, and how do you--you know, how
do you get people with passion to move the risk forward? You'll
find solutions in Alaska. There are a lot of passionate people
in Alaska. There's a lot of creativity across Alaska happening
today. How do we get that and share it, share the successes,
and then learn from the mistakes and don't repeat them?
So Brian also mentioned the Renewable Energy Fund. I'm on
record on that--on those projects as zero failure. OK. Now,
he's--and I think we can pull it off. But that's not the
program designed to look at technology, to look at advanced
technologies. It's just designed to deploy technology. ACEP is
very good at looking at technology, looking at the risk,
evaluating, bringing the issues to the forefront and solving
them. That's really one of Gwen's strong points.
So we need to, as Alaskans, come together and figure out
what we really value, how we want to move forward, how are we
going--how we deal with risk, and don't hammer the guy who has
a little failure, and encourage him to say well, OK, if that
didn't work, tell me another way it will work. So, you know, in
my prior life, I was--I was told I would--had to make two
mistakes a day. If I wasn't making mistakes, I thought I wasn't
doing anything. I think we need to get that attitude in Alaska.
Thanks.
Senator Murkowski. OK, Gwen, you looked like you wanted to
hop in there.
Ms. Holdmann. I did. I've just been thinking about the
project here at Chena, and maybe--I'd like to give a little bit
of history on the very, very early pre-Chena history of the--of
this low temperature geothermal power plant. I think that it
might be illustrative in the way this project was brought
together in the private sector and how we may be able to shift
some of the ways that things are done at a national level in
terms of having more collaboration between different fields.
We tend to have stove pipe technologies a little bit. The
wind guys are wind guys. They work on wind. The hydrokinetic
guys, they work on hydrokinetics. You know, that's also a
challenge I've been dealing with at the university. Energy is
an interdisciplinary problem, it's a--and the solutions are
going to be interdisciplinary, too. We need to get more kinds
of cross collaboration between different programs at the
national level, and especially I think within the national
labs, I'd like to see that happen as well.
To give you a little background on how this Chena chiller
came to be is that United Technologies is a very large company.
They have a number of different subsidiaries. What they do from
time to time, and this is at the risk of telling this story
without representatives from United Technologies here, but they
bring different engineers, their top level, brightest guys from
different programs together and to kind of think tank sort of
circumstances. So guys that really have nothing to do with each
other in their areas, don't have anything in common, to sit
down and figure out what they might be able to do together to
come up with a new product or a new idea that could ultimately
become a marketable product and make the company money.
So in this case, they took some of their bright guys from
Carrier Refrigeration that had this very, you know, standard,
off-the-shelf, 100-year-old refrigeration technology, mixed it
with a guy that had designed a new turbine for a jet engine,
and literally out of that thinking came to say gee, we're
actually--this waste heat recovery, this low-temperature waste
heat recovery system using a new turbine design, coupled with
the Carrier Refrigeration system. So essentially this is
running a refrigeration system in reverse where you're taking--
where you're taking a temperature difference, a hot and a low
temperature, and then you're using that to make power rather
than electric power to create a temperature difference. Which
is how roof power refrigeration systems work.
So they got these guys together, they engineered this
system, and then in talking about it a little bit more, they
realized there's geothermal applications. That's really how
this happened, but it really started from this cross seeding of
different technology areas. I don't see that we're doing that
enough in this country. If there's ways that we can kind of
facilitate that in order to find new solutions, and I think
improve all of our systems and the challenges that we have,
that would really be something that would be worth taking a
look at.
I should also note that there's a critical juncture in
there, too, where DOE stepped in and kind of funded that
project here at Chena. Without that, I don't think that there
would be a United Technology pure cycle, geothermal, low-
temperature power plant today. I don't know if that's true, but
it certainly was a critical juncture where that Federal funding
has now moved us into a commercially available technology that
hopefully will benefit a lot of other people.
Senator Murkowski. Your point about kind of the silos that
we have within the energy world I think is very apt. We see
that, and it's--so much of it, unfortunately, is about the
funding that comes to you. If you're working wind and you're
competing with all of the other energy sources for those
dollars. Those Federal dollars, unfortunately, are limited, and
they're limited at all other levels as well. So instead of the
sharing and the collaboration that you're talking about, and
that I absolutely agree must happen in order to facilitate some
of the ingenuity that has to go on in order to accomplish some
of these difficult tasks, our systems are not set up to really
allow for that.
I've actually had a conversation with Secretary Chu about
that. You know, he's coming at it from the researcher/scientist
point of view, and I think he appreciates the difficulty of it.
Our challenge is to do what we can to really help facilitate a
greater level of collaboration. Because we don't have it. So
maybe rather than starting from the Secretary's position and
working on down, we need to force it from the bottom up. I
think you see that, and I appreciate you giving the history and
the background on this, because I think it does demonstrate
that if you have the passion that Steve talks about and enough
people that are willing to think outside the box in terms of
the solutions, we can get there. Again, jumping in with the DOE
grants at the appropriate time doesn't hurt the situation
either.
Chris, I'll let you make a comment, and then we're going to
have to move to the next panel.
Mr. Rose. Sure. Just a quick comment that reflects on both
of your questions. There are winners and losers that are chosen
on the generation side for a number of reasons, and we have
unique challenges here, but as Gwen pointed out, we're the
highest energy users per capita in the world here. So what we
really should be focusing on is energy efficiency. There are
many reports out there and studies that point out we could
reduce our energy load by 20 to 25 percent.
So that's 20 to 25 percent of the future generation we
don't have to build. So the more we can focus on the energy
efficiency part up front, the less we have--generation we have
to build. If we're the highest energy per capita users in the
world, we should be leaders in energy efficiency. If we were
looking at ourselves as a business, we would call that waste,
and we would say, we're going to make more money because we're
going to waste less. So I think we have to kind of look at
ourselves that way and say, we're going to waste less, but
we're going to keep all that money in our economy and we're
going to let it multiply. Thank you.
Senator Murkowski. I think when you remember and you
appreciate that we are the No. 1 consumer, and you also
appreciate the extent to which energy costs impact us in this
State--you go outside to the Lower 48 and the average American
household spends about 3 to 6 percent of their income on energy
costs. In some of the rural parts of this State, we have
families that are spending, you know, close to 47 percent of
their income on energy costs.
When you put it in that perspective, we've got an
obligation as a State to figure it out, how we're going to do
it here. Because yes, it impacts--it impacts people all over
the country, but there's a huge difference between 3 to 4
percent of your family budget going toward energy costs, and
when the price spikes, boy, you deal with it. But when you're
paying close to 50 percent of your family income on energy and
price spikes, we don't have anywhere to go. So this is an
initiative that, again, should consume all of us. It should
make us passionate about how we can really make a difference in
reducing those costs, working toward an energy efficiency and
conservation. But really using the ingenuity that I think makes
Alaska wonderfully unique and wonderfully independent and
figure out how we can do better by all those who live here.
So with that, I want to thank you for your comments. If you
have additional input that you want to provide for the record,
we'd certainly welcome that. You will be receiving some
additional questions from me that if I could have you respond
in writing, we will incorporate that as part of the record, as
well. So thank you for your time and your leadership on energy
issues.
Let's go ahead and invite up the second panel, if we can,
please.
OK. I would like to go ahead and get started with our
second panel. We probably have about an hour to move through
this second group. I know that we've got a whole schedule of
events after this, and so I want to make sure that we have
sufficient time to hear from, again, this distinguished group
of individuals. We have on the second panel, Mr. Bernie Karl.
Bernie has been mentioned repeatedly this morning. So I'm glad,
Bernie, you were here to take all the comments, compliments,
and be here to defend yourself if necessary. Bernie Karl is the
president of Chena Hot Springs Resort here, and the head of
Chena Energy, LLC. We also have with us Barbara Donatelli.
Barbara is the vice president of CIRI, and is very involved
with the Fire Island wind farm. Next to Barbara we have Jim
Dodson, who is president of the Fairbanks Economic Development
Corporation. We also have Doug Johnson, who is the Alaska
project director for the Ocean Renewable Power Company. The
final individual on the panel on the panel rounding us out is
Dennis Meiners of the Intelligent Energy Systems. So it's a
pleasure to have the five of you with us this morning.
Bernie, we will begin with you. As a thanks to you and to
your wife, Connie, for hosting the Renewable Energy Fair, and
allowing us to conduct this field hearing at Chena. We
appreciate it a great deal.
STATEMENT OF BERNIE KARL, PROPRIETOR, CHENA HOT SPRINGS RESORT
AND GEOTHERMAL POWER GENERATION FACILITY, CHENA HOT SPRINGS, AK
Mr. Karl. Senator Murkowski, thank you for the opportunity
to address both you and the committee on what I believe is
probably the most important issue facing the world today:
energy. I'd like to--a special thank you today to Senator
Stevens, who's been involved in all of our energy fairs so far,
and who has been one of the strongest supporters of renewable
energy in the country. So my thanks to Senator Stevens for
being here today, and for all that he's done for the State of
Alaska, because it has been tremendous, and without his help
there would be a lot of--a lot of rural Alaska that would not
have water, would not have sewer, and would not be looking at
renewable energy today.
With that being said, what can we do? I think that Einstein
says it best. Einstein says that imagination is more important
than knowledge. I think our problem is, is that we don't teach
imagination. We don't teach that to our children to use it. If
you have an imagination, you can imagineer. Without imagination
there's no imagineering going on.
Gwen didn't have it exactly right when she talked about
United Technologies, because we were already going to build a
power plant, but not with them. We were building it with
Barbara Nichols. There would have been a power plant built, so
she was wrong about that, because it would have been built
because I had already signed a contract with them with a
handshake. We already had the $750,000 to do it. It would have
worked on this low-grade temperature, because they were already
doing it.
But what happened is United Technologies called us and
said, hey, we understand you're going to do this. You heard of
us? I said, no, I haven't heard of you. Who are you? We own
Sikorsky Helicopter. I know about Sikorsky. We own United--we
own Carrier Refrigeration. I said, well, I've got some of those
rascals. We own Otis Elevator. I said, I was on one this
morning. Hamilton Sundstrand. I said, well, I went to school
for Sundstrand Pumps. OK, you're calling, how can I help you?
You see, even though you have all of these brilliant people
doing brilliant things, sometimes you still need a little
imagination to go with it with all this brilliance. So when
they called, they said, hey, we got this idea, would you want
to be involved in it. I said, we already have a deal going. So
no, I don't think we want to be involved. Well, my contract
with Barbara Nichols, I was released from it because he said
he's an engineer and he also worked for Pratt & Whitney many
years ago. He said, I believe this is a better idea, I believe
you should go with them. I believe this will be better for more
people.
Today you're going to find out it will be better for more
people. With a portable unit that will be able to go to an oil
well and hook up in 1 hour. There's 250,000 producing oil and
gas wells just in Texas alone. One State--just one State--
150,000 oil wells that are not even producing. They're capped
off. If we just took that, we could make 5- to 10,000
megawatts. Not my number. Not my number. Comes from MIT.
If we harness 2 percent of the earth's energy, just 2
percent of it, that's a thousand times more than the world
consumes. We talk about solar, we talk about wind, we talk
about the money they get. Senator, as you know, the geothermal
budget was zeroed out. Zero. With your help and with Senator
Steven's help, you were able to get back some money, a small
amount. Thank you for that. Thank you for what you've done. But
it was zeroed out. It's not like--it's not like we care about
zero. Try that on for size.
Why do we have serial number 1, serial number number 2? Why
do we have the first portable unit here if it's such a mature
industry? I say the geothermal is every bit as important, or
maybe even more important because you can base load on it. It
is the only renewable energy that you can base load on. But yet
it gets the least amount of attention; even to this day it gets
the least amount of attention. Shame on us. It's because we're
addicted to oil in one arm, and we're addicted to greed that
somehow we have convinced people that we can't do it. The word
can't is not in my vocabulary. It shouldn't be in our
children's vocabulary.
Webster's got to be an idiot. Webster says that failure is
if you don't succeed. So we have these projects, you give them
a grant, and they don't succeed, so you say it's a failure. I
say failure is if you don't try. I say failure is if you give
up. If you don't give up, you could never be a failure. But yet
we teach our children that failure is if you don't succeed.
Shame on us.
I've not heard one person mention hydrogen, or mention
carbon. The 2 most prevalent elements on earth. The good Lord
builds everything out of carbon, and builds everything out of
hydrogen. The only one that doesn't use it very well right now
is man. The only mammal on earth that deliberately destroys his
environment and then denies it is us. What is wrong with that
picture? Something is wrong with it.
I mean, we should be the world's leaders. Alaska should
lead this parade. Why do you want to follow a parade when you
can lead it? With our high energy costs, we should be leading
the parade. My wife and I are motivated by huge debt load.
That's what motivates us. We have $2 million of our money, and
$650,000 that we borrowed. If anybody thinks he's a self-made
man, he's a fool. Because all of these people have helped you
all through your life, starting with your maker, and then with
your parents, and then all these people around us.
United Technologies has been a tremendous partner. The
University of Alaska Fairbanks has been a tremendous partner.
The food that you see growing here, none of that would be
happening without the university. There's a lot of knowledge at
the university. Go use your universities. Do I think they
should be funded? Absolutely. Do I think we can overstudy
stuff? Absolutely. Do I think we need to have projects that are
successes? Absolutely. Do I think that the future is the
brightest it's ever been in the history of man? Absolutely.
There's more opportunity now than there's ever been in the
history of man. But it's in reinventing ourselves. It's not as
business as usual.
Right now you'll notice when you look around this Energy
Fair, not only are there a lot of vendors that have a lot of
good ideas, but go look at the LEDs, the light-emitting diodes.
These have the same kelvin, they have the same spectrum as your
light bulbs. They will reduce your power costs by--for lighting
by at least 50 percent. We will guarantee it. We will guarantee
it. You look at the new lights in the greenhouse. They're red
and blue spectrum, because that's what the plants want. It's
going to cut our lighting load by 90 percent. By 90 percent.
We've spent 3 years of our life looking into it. Now we are
importing them. They'll be available for Alaska. I believe that
Alaska can cut its lighting load for all of Alaska in the next
2 years by 50 percent. In 2 years' time. What can you do now?
You do that. You do it now, not tomorrow, today.
What was the best time to plant a tree, a Chinese proverb?
Thirty years ago. What's the best--second best time? Today.
Change your light bulbs. Look at the solar heating out here.
Why do we have it here? Because it makes infinite good sense.
That's why. Because technology has come that far. It's here
today. Change today. Do what you can do today. Remember that if
you take just a hug, just a hug from the earth, there is enough
energy there to take care of all of our needs. All of our
needs. I'm not saying that it is the silver bullet. I'm just
saying there's enough there, and there's been very little
effort put into it. Thank you for the opportunity.
[The prepared statement of Mr. Karl follows:]
Prepared Statement of Bernie Karl, Proprietor, Chena Hot Springs Resort
and Geothermal Power Generation Facility, Chena Hot Springs, AK
My name is Bernie Karl, and I run the Chena Hot Springs Resort and
Geothermal Power Generation Facility in Chena Hot Springs, Alaska. My
wife and I have been devoted to this project for many years; have
invested much of our own resources, time, energy and imagination into
making this happen.
What is it exactly that we want to have happen, and why are we so
devoted to our project at Chena Hot Springs? Alaska is known for its
vast quantity of natural resources, fossil fuels, and minerals. We have
a long history of energy development that continues to lead us in the
direction of fossil fuels. Times are changing however. Petroleum has
peaked in worldwide production, and the price of this commodity is
hardly stable. The price of a barrel of crude went over $150 last
summer and is now $70. Stable gas prices and the hope for renewed
petroleum discoveries at workable costs are gradually vanishing. Any
business argument concerning fuel would say that we should diversify to
the use of other fuels, to be better prepared when our prospects become
poor. We feel that the force of these developments and continued high
prices must turn us towards a new and active consideration of renewable
energy sources, new biomass energy generation, as well as food
production.
We feel that Chena Hot Springs is well positioned to test, develop,
and otherwise exploit these possibilities: from the ``old'' days when
geothermal energy was considered viable only at temperatures of 230 F
and our temperatures of 165 F were considered a joke, we have succeeded
in generating 250 kW from relatively low temperature water. We are
currently testing a mobile geothermal Organic Rankine Cycle Unit which
draws off of an oil well with a mixed oil/water effluent stream which
will soon be sited in Florida. Texas, for example, has 250,000 oil and
gas wells which produce 95% hot water along with 5% oil and gas.
Geothermal opportunities abound and will expand with the introduction
of this mobile unit. The further we explore, the more we find, and we
have only just begun. Chena Hot Springs is at the cusp of this research
and development effort.
Aside from worldwide considerations, the needs for alternative
power specifically for rural Alaska are enormous. The exhaustion in
late winter of petroleum resources which come to Alaska villages by
barge up the rivers and the need then to fly replacement fuel by plane
to interior villages, the chronic high fuel and PCE costs, several
times that of Anchorage or Fairbanks, and all of the associated high
village expenses which flow from these high basic fuel prices, are
nothing less than criminal. This must change.
This project and its possibilities for rural Alaska represent not
just thinking up a new strategy or thinking outside of the box. Such
metaphors are far too meager. Changes in energy use and the resultant
possibilities for rural Alaska are immensely difficult because they are
so monumental. These changes embrace an overturning of cultural norms,
the acceptance of a western business model, and changes in styles of
living. Our efforts should be of the same magnitude as the Nana
Regional Cooperation, which used to say in signing off their radio
stations, ``This program was brought to you by the Nana Regional
Cooperation, doing business in Alaska for Ten Thousand Years.'' We have
to `make corresponding changes in energy use and respect the earth's
bountiful gifts.
Things have, however, started to change. I am thankful to the
Department of Energy and to the Obama Administration for their
leadership in providing the much needed funding to get some of these
projects off the ground. It was three years ago that I testified before
this committee in Washington D.C. At that time, there was a threat of
eliminating the Geothermal Technologies Department within the DOE.
Today, there is funding available to further geothermal projects, one
of man's longest used renewable energies.
Nevertheless, in this land of massive oil, natural gas, and coal
development our goal is to bring to light the development of non-fossil
fuel resources: geothermal, biomass, wind, hydro, and solar. Alaska is
our country's last frontier, but has the potential to be first in
renewables. I would like to thank this committee for hearing my
testimony, and personally thank Senator Lisa Murkowski for making this
field hearing possible.
Senator Murkowski. Thank you, Bernie. I appreciate your
vision and your passion.
Barbara Donatelli.
Ms. Donatelli. Yes.
Senator Murkowski. Welcome.
STATEMENT OF BARBARA DONATELLI, SENIOR VICE PRESIDENT,
ADMINISTRATION AND GOVERNMENT RELATIONS, COOK INLET REGION
INC., ANCHORAGE, AK
Ms. Donatelli. Thank you very much, Senator Murkowski.
I really appreciate the opportunity to be here today and
give an update on the Fire Island Wind Farm. That's currently
the largest renewable energy project under development in
Alaska, and we're really pleased to be able to be a part of
working on bringing this project online.
CIRI and its partner, enXco formed Wind Energy Alaska in
2007 to develop and operate commercial-scale renewable projects
in Alaska. The company is developing Alaska's first commercial-
scale wind farm on Fire Island three miles west of Anchorage in
Cook Inlet. The 36-turbine, 5-megawatt project will produce
clean renewable electricity, and serve as an anchor to help
additional railbelt wind projects to achieve national goals for
energy independence and reduction of greenhouse gas emissions.
We expect to generate enough power to--enough power for more
than 18,000 homes in Anchorage.
Southcentral Alaska currently relies on natural gas from
the Cook Inlet basin for most of its electricity and heating
energy. In 2008, Railbelt Utilities, excluding Golden Valley
Electric, generated more than 93 percent of their power with
natural gas. However, as we all have heard, the Cook Inlet gas
production is in steep decline, down from 205 billion cubic
feet in 2005 to 146 billion cubic feet in 2008. An alarming 29-
percent drop in only 3 years. At the same time, price
volatility is increasing.
In 2008, natural gas prices fluctuated from a high of
$13.32 per million cubic feet in July to a low of $5.38 in
December. Fluctuations of this magnitude make planning
difficult and have a devastating impact on both residents and
businesses. The Fire Island project will generate flat-price
renewable power. That will diversify Southcentral Alaska's
energy resources to increase reliability, and decrease rate
payer's vulnerability to natural gas shortages and price
swings.
Developing the Fire Island project has not been without its
challenges. A key challenge we still must overcome is securing
approval from the FAA to relocate the aviation navigation
equipment, commonly referred to as the VOR, off of the island.
As it currently stands, FAA restrictions necessitated by the
VOR will not permit us to build an economically viable project.
On July 15, 2009, Wind Energy Alaska filed new applications
with the FAA to expand the proposed Fire Island Wind Farm to a
financially viable 36-turbine project. Then just this week, in
anticipation of receiving a notice of presumed hazard, Wind
Energy went to Washington DC and delivered a VOR relocation
plan. We believe that plan will provide the FAA the data it
needs to determine that the potential interference caused by
the turbines can be mitigated by relocating the VOR and thereby
allowing the project to move forward.
Our plan is to construct an upgraded digital doppler VOR on
property at Ted Stevens Anchorage International Airport. Then
after FAA certification of the new equipment, the existing Fire
Island VOR facility will be decommissioned. Analysis indicates
that the VOR can be relocated with no adverse impact to
airspace operations, and with the benefits of increased
facility security, reduced operation and maintenance costs, and
equivalent or improved air navigational services for pilots.
Importantly, Wind Energy Alaska is not asking the FAA to
move the VOR. Instead we are asking FAA to enter into a
memorandum of agreement that would allow the project to move
the VOR with FAA support on an expedited basis. If we can meet
this schedule, the Fire Island project will begin delivering
power by the third quarter of 2011.
Now, a little bit about rural Alaska energy needs. As we've
heard already from many other folks who've testified, currently
most rural heat and electricity needs are met with heating fuel
and diesel. These costs have risen sharply in recent years.
Some communities are trying to find ways to reduce their energy
costs by improving efficiencies, and by developing renewable
energy sources.
Currently the lowest cost renewable energy available today
is wind. There are nearly a dozen communities around the State
with combination wind-diesel systems displacing diesel fuel
burned in those communities. As we've also heard, the energy
storage is one of the biggest challenges to renewable energy
development. Electricity produced by wind generation must be
used pretty much at the same time it's produced. It can't
really adjust to changing demand. Consequently, a system is
needed to store that excess energy when demand is low, and then
to supply extra power when demand is high.
Currently, electricity storage is difficult, inefficient,
and expensive. Commercial batteries, for instance, run into the
millions of dollars per megawatt capacity. Other hurdles to
broader development of rural wind systems include lack of
availability of village-scale turbines, lack of availability of
spare parts, and lack of a trained work force in many cases.
Unfortunately some of our communities in Alaska lack
adequate wind sources necessary for the existing turbine
design. Research into low-speed wind turbines could lead to the
development of a machine capable of serving communities that
currently don't have sufficient wind resources for wind
generation.
There are some potential synergies between the Fire Island
wind project and rural renewable energy initiatives. The Fire
Island project could include several smaller-scale turbines
that could be used to teach Alaskans to install, maintain, and
operate wind projects in their own communities.
Finally, some recommendations about what can be done to
promote wind development. On the policy side in locations where
wind development has proposed potential hazards to aviation and
must be approved by the FAA, we believe the current process
could be streamlined to help bring projects online on a more
timely basis. This could possibly be accomplished through
establishing an office within FAA, or assigning a project
manager to potential wind development. That could help navigate
the wind developer amongst the various FAA directorates and
help, you know, get it through the approval process in a more
timely manner. We think that would be area that could--we could
really be a help to not only wind projects in Alaska, but
potentially around the country.
On the technology side, research into the development of
energy storage systems that really address this intermittent
nature of most renewable energy technologies would be a real
boost to not only wind generation, but to other renewable
projects. We think the development of work force training
centers that support the implementation, operation, and
maintenance of renewable energy technology--technologies would
be an important factor as well. The development of enhancements
to existing wind turbine designs to extract more energy at low
wind speeds.
So thank you again for allowing us to testify about our
project and some of the challenges and--that we've encountered.
[The prepared statement of Ms. Donatelli follows:]
Prepared Statement of Barbara Donatelii, Senior Vice President,
Administration and Government Relations, Cook Inlet Region, Inc.,
Anchorage, AK
introduction
My name is Barbara Donatelli. I am the Senior Vice President of
Administration and Government Relations for Cook Inlet Region, Inc.
Thank you for providing CIRI an opportunity to testify today about the
largest renewable energy project currently under development in Alaska.
CIRI and its partner enXco Inc. formed Wind Energy Alaska in 2007
for the purpose of developing and operating commercial-scale renewable
energy projects.
CIRI is one of 12 Alaska-based corporations established by the
Alaska Native Claims Settlement Act of 1971 to benefit Alaska Natives
who had ties to the Cook Inlet region. The Anchorage, Alaska-based
company is owned by more than 7,500 Alaska Native shareholders. CIRI
and its subsidiaries have a well-diversified businesses portfolio that
includes energy and resource development, real estate development,
oilfield and construction services, tourism, telecommunications and
government contracting.
enXco has been a leading wind energy project developer and operator
for more than two decades. The company develops, constructs, operates
and manages renewable energy projects nationwide. It is a significant
owner and developer of wind energy installations in the United States
and is North America's leading third-party provider of operations and
maintenance for wind farms.
CIRI and enXco each own a 50 percent interest in Wind Energy
Alaska.
fire island wind project
Wind Energy Alaska is currently developing Alaska's first
commercial-scale wind farm. The project is located on Fire Island,
which lies three miles west of Anchorage in Cook Inlet. The 36-turbine,
54-megawatt project will produce clean, renewable electricity and serve
as an anchor for additional Alaska Railbelt wind projects to help
achieve national goals for energy independence and reduction of
greenhouse gas emissions. The project will generate enough power to
meet the annual requirements of more than 18,000 residential customers.
Unlike any other region in the United States, Southcentral Alaska
relies almost exclusively on natural gas from the local Cook Inlet
basin to generate electricity. In 2008, Railbelt utilities, excluding
Golden Valley Electric, generated more than 93 percent of the region's
electricity by burning natural gas produced from Cook Inlet. However,
Cook Inlet gas production is in steep decline, down from 205 billion
cubic feet in 2005 to 146 billion cubic feet in 2008--an alarming 29
percent drop in only three years.
Clean, renewable wind energy will help diversify power generation
resources, increase reliability and decrease ratepayers' vulnerability
to supply shortages and price volatility of natural gas. In 2008 alone,
natural gas prices fluctuated wildly setting a high price in July of
$13.32 and subsequently tumbling to $5.38 per million cubic feet in
December. Price fluctuations of this magnitude have a devastating
impact on both the citizens and businesses in Southcentral Alaska.
As the natural gas supply situation tightens, it is foreseeable
that volatility, as well as the absolute price, will increase. The Fire
Island wind project can generate 54 megawatts of clean, predictably-
priced renewable energy within two years, if the project goes forward.
Developing the Fire Island wind project is not without its
challenges. One of the critical challenges is securing approval from
the Federal Aviation Administration (FAA) to relocate the navigation
equipment, commonly referred to as the VOR, which is currently located
on the island.
On July 15, 2009, Wind Energy Alaska filed applications with the
FAA to erect 36 wind turbines on Fire Island. This week, in
anticipation of receiving a Notice of Presumed Hazard, WEA presented
the Fire Island Wind Project VOR Relocation Plan to FAA directorate OE/
AAA (Obstruction Evaluation/Airport Airspace Analysis). The intention
of the plan is to provide the FAA with the necessary analysis and data
to mitigate the hazard and allow the project to move forward.
WEA's plan is to construct an upgraded, dopplerized VOR located on
property at theTed Stevens Anchorage International Airport. Then, after
certification from the FAA, the existing VOR facility located on Fire
Island will be decommissioned. WEA's analyses indicate that relocation
of the VOR can be completed without adverse impact on airspace
operations and will offer the FAA and Anchorage International Airport
increased security, reduced operation and maintenance costs and will
provide equivalent or better air navigation services to the affected
aeronautical community.
Importantly, WEA is not asking for the relocation to be undertaken
by the FAA. Rather, WEA requests an agreement for relocation and
requests FAA support in completing the relocation project on an
expedited timeframe.
WEA has met with airport management, regional FAA management,
aviation stakeholders and Federal, State and local government
officials. None have opposed the project or the mitigation plan to
relocate the VOR, and several have expressed strong support for
relocation. A dopplerized navigational aid facility on Ted Stevens
Anchorage International Airport property would benefit the FAA,
aviation users, the airport, security interests and renewable energy
proponents.
rural alaska needs
While the cost of electricity in Southcentral Alaska is rising, the
cost of living in rural Alaska is extremely high by national standards.
Energy costs in rural Alaska exceed national averages by several orders
of magnitude. Individuals and families are leaving villages, large and
small, due in part to the overwhelming cost of energy.
technology
Currently in rural communities, heat and electricity energy needs
are met almost entirely with heating fuel and diesel. Liquid fuel costs
have risen sharply in the last several years. Deploying technologies
that increase efficiency and reduce or avoid the use of liquid fuels
are needed to lower the overall cost of energy or at least reduce the
rate of increase.
There are a number of renewable energy technologies on the horizon
in Alaska. Solar has been considered for rural Alaska and some
experimental projects have been proposed. Hydro kinetic is being
investigated for use in river applications. Tidal generation is being
evaluated in several locations. Low temperature geothermal has been
demonstrated as viable at Chena Hot Springs. Small hydro is being
evaluated and shows promise in a limited number of locations.
The lowest cost renewable energy available today is wind energy.
There are nearly a dozen combination wind/diesel systems in Alaska
today. All are deployed in rural settings and displace diesel fuel
burn.
One of the chief obstacles to greater use of all renewables is
storage of the energy. Since electricity has to be used as it is
produced, storage is difficult, inefficient and expensive. Batteries,
for instance, are very expensive when used to store large amounts of
electric energy.
In at least three rural Alaska locations excess wind energy is
stored in the form of hot water. During periods when more wind energy
is being produced than a village can absorb, large water heaters
automatically turn on. Water is heated and used for space heating in
public buildings. Greater use of hot water storage will increase the
use of renewable energy to meet more of the total energy needs in rural
village settings.
existing studies
The Institute of Social and Economic Research (ISER) in a December
2008 study concluded that excess wind could be stored as hydrogen. The
hydrogen could be used for heating and local transportation needs, i.e.
small trucks, snow machines and 4-wheelers. The basic idea is to find
ways to meet local energy needs with locally available resources.
The study discusses handling, maintenance and sustainability issues
as well. Studying energy storage to find ways to more reliably use
local resources to meet the total energy needs of small rural
communities would benefit the individual community as well as increase
the use of renewables generally, whether the by wind, solar,
geothermal, hydro or others underlying energy sources.
Other basic hurdles to broader deployment of rural wind systems is
lack of availability of small turbines for village applications,
commonality of turbines among villages, spare parts and work-force
training. In a 2004 report to the Denali Commission, BP engineers
postulated that wind energy could benefit villages operating on diesel
for electric power generation. The report suggested choosing a common
turbine for a given region. The common turbine would allow for
interchangeable spare parts and streamlined training for technicians
performing turbine maintenance within a geographical region.
synergies
Potential synergies exist between the Fire Island wind project and
the renewable energy initiatives of rural Alaska. The Fire Island
project could be used to train Alaskans to perform turbine maintenance
for wind projects in rural communities. Wind turbines for rural Alaska
are smaller but operate on the same principles as those used in the
Fire Island wind project. By installing several smaller turbines on
Fire Island the project could double as a work-force and technology
implementation training site.
Unfortunately many communities in Alaska lack the wind, hydro,
solar, geothermal, hydro kinetic or tidal resources necessary to
utilize a renewable energy resource. Research into low wind speed wind
turbines could lead to the development of machines capable of serving
villages with average wind speeds currently considered too low for
energy extraction.
additional research
Rural and urban communities across the Nation would benefit from
additional research in the following areas:
1. Development of energy storage systems that address the
intermittent nature of most renewable energy technologies as
well as help meet the broader needs of the community, including
transportation and heating.
2. Development of a workforce training center to support the
implementation, operation and maintenance of renewable
technologies in rural Alaska.
3. Development of enhancements to existing wind turbine
designs to extract more energy at low wind speeds.
summary
Thank you again for providing CIRI an opportunity to testify today
about the challenges of developing the Fire Island wind project. We
look forward to working collaboratively with the community, the FAA and
other State and Federal officials to make the first commercial-scale
wind project in Alaska a long awaited reality.
Senator Murkowski. Thank you for hanging in there. It's
been a long process.
Ms. Donatelli. It has.
Senator Murkowski. We know that. Next let's go to Jim
Dodson.
Jim, welcome.
STATEMENT OF JIM DODSON, PRESIDENT & CEO, FAIRBANKS ECONOMIC
DEVELOPMENT CORPORATION, FAIRBANKS, AK
Mr. Dodson. Thank you, Senator Murkowski. Thank you for
your continued commitment to all Alaskans and Alaska's energy
needs.
Alaska is blessed with vast energy resources. Beyond our
conventional non-renewable resources of oil, natural gas, and
coal, Alaska is also blessed with abundant natural resources--
renewable natural resources in the form of water, wind,
geothermal, solar, biomass--renewable resources that could
provide for Alaska's energy needs virtually indefinitely.
Unfortunately, these renewable energy resources, most within
easy reach of all Alaska communities, have been woefully
underexplored and underdeveloped until only recently, while our
vast conventional energy resources, particularly oil, have been
a boon to State government, but have proven a drain on most
Alaska citizens and most Alaska communities.
Alaska is a sparsely populated State, only 680,000
Alaskans. Our communities are spread across an immense State
that covers 660,000 square miles. This makes the distribution
of goods and services, like heating fuel and electric power,
expensive and challenging. Over 50 percent of all Alaska homes
are heated with fuel oil. Sixty-seven percent of their energy
cost is from home heating.
The cost of energy is crushing our economy. Many rural
Alaska residents are leaving their communities, communities
that have existed for hundreds of years are no longer
sustainable because of the cost of energy. For Interior and
rural Alaskans living in a winter Arctic environment, saving
money by simply turning down the thermostat at 40 below, or
turning off our lights when the sun only shines a few hours a
day, is not an option.
Alternative and renewable energy sources can be a part of
Alaska's energy solution, but it is not the entire solution.
Affordable, reliable, and sustainable alternative energy will
take time, research, and investment if we are to achieve
America's goal of 25 percent renewables by 2025. Twenty-five
percent renewable, 75 percent conventional, but 100 percent
affordable.
Fairbanks Economic Development Corporation and the
Fairbanks community has promoted energy issues from
conservation, to biomass, to energy from municipal waste, to
in-State use of natural gas, to hydroelectric power generation,
to a biomass/coal to liquids project.
When working on a biomass project we found that though the
resource potential in the Fairbanks community, including woody
biomass, crop slash, processed timber residue, land clearing
and fire mitigation materials, and municipal solid waste were
substantial. Only municipal solid waste was at a stage where it
might be immediately used for energy production. For other
biomass resources, questions regarding their true abundance,
chemistry, cultivation, reforestation would all have to be
answered before they could truly be utilized as a sustainable
energy source.
Alaska has vast forest lands. Its forest resource potential
is immense. However, Alaska lags far behind other States in
accurate, up-to-date forest inventory analysis. Neither the
Federal Government nor the State have adequately invested in
the necessary forest inventories. Surveying for forest type and
tree species using on-ground techniques is critical for any
sustainable use of biomass for energy resource.
Also, just as a birch is different from barley, the energy
output of different plant species can be radically different.
Understanding the Btu output per volume of individual
indigenous and introduced species is critical. We must
determine what crops will produce more energy from use than
they consume from production and transportation.
When working on a waste-to-energy project, we found that
existing commercial technologies were not scaled to be economic
for similar communities. Communities such as Fairbanks, with
just less than 100,000 people, and all of rural Alaska, cannot
afford the heat and power generated from waste-to-energy
projects that are currently--or equipment that is currently
available commercially. Research, development, and testing,
demonstration must be continued to allow waste-to-energy
projects to become a viable part of the energy solution for
small Arctic communities.
In December 1958, an ad in the Fairbanks Daily News-Miner
read: Coming, Natural Gas for Fairbanks, Nature's Perfect Fuel
for Home and Industry. As you know today, more than 50 years
later, that fuel source is still coming. With only 680,000
residents, Alaska is not a large enough market to attract
private investment in a gas line solely to service Alaska
markets. That perfect fuel that could reduce Alaska's energy
cost, that should be Alaska's fuel for 75 percent--be the
Alaska fuel for communities use 75 percent of their energy
needs, that would contribute to the reduction of Alaska's
CO2 footprint, that can eliminate the Fairbanks
PM2.5 issue. It is no closer to Fairbanks today or the majority
of Alaska communities than it was 50 years ago. Conventional
thinking will not solve this problem; simply hoping for private
industry to make natural gas available to all Alaskans at an
affordable price will not reduce our energy costs, meet EPA air
quality guidelines, or reduce our CO2 emissions.
Innovative thinking and bold leadership from our national and
State officials is needed to make natural gas available to all
Alaskans, and it is needed now.
The first license request to build the Susitna Dam project
was submitted to the Federal Regulatory Commission in 1984.
That application was dropped within a year when the price of
oil dropped and energy was perceived to be cheap.
Hindsight tells us that the decision to drop the Susitna
Dam application was wrong; energy produced from crude oil is
not cheap, and our 1985 decision not to proceed with the
construction of that project has contributed to today's high
energy costs, increased CO2 emissions, and possibly
global warming. Building Susitna Dam is a long-term project; it
is not the answer for today's staggering energy costs, but it
is an answer for future clean energy needs, and today is the
time to restart the Susitna Dam project.
In 2008, the Fairbanks Economic Development Corporation
contracted with Hatch Limited for an engineering and
feasibility study on a coal, biomass, and natural gas to liquid
facility. That facility would take underutilized, low-value
Alaska resources--biomass and coal--and produce jet fuel,
Arctic-grade home heating fuel, no-sulfur road diesel. It would
provide synthetic-blended liquid fuel for the United States
military, firmly anchoring Alaska's military, a full 25 percent
of our economy, to Alaska. It could be a base-load consumer for
an in-State natural gas pipeline. Anccording to publications by
Dr. Paul Metz of the University of Alaska and the United States
Department of Energy, there is a strong indication that the
CO2 produced in such a facility would be as valuable
as a miscible injectant for enhanced oil recovery, sequestered,
while at the--still at the same time allowing for the
production of up to 12 billion additional barrels of North
Slope crude from existing fields.
Alaska is uniquely positioned to help America--to help
America transition to a new energy future. No other people and
no other State in our Nation are more reliant on energy for
their survival. No other people have more to lose should we
fail to succeed than the people of Alaska. No other people have
more of a vested interest in seeing that these new and
innovative technologies work. No other State has such a wide
diversity of renewable, sustainable fuel sources at such a
tremendous--at such an enormous abundance than Alaska.
Therefore, no State is better positioned to drive the research
on these new technologies than Alaska. If you create it, Alaska
can power it. No other State has such a wide range of
temperatures and climatic extremes, is as hard or unforgiving
as Alaska. Therefore, Alaska is better positioned to serve as a
test bed and proving ground for new energy technologies than
anyone. Alaska tested, Alaska tough resonates for a reason. If
you can make it work here, you can make it work anywhere.
It is unfortunate that the national discussion on energy is
often dominated by advocates of the extremes--those who say we
can continue on forever with business as usual, or those who
say we must chuck conventional energy sources and move
wholesale into renewable. Alaska and America need both
renewable and conventional energy. The president's goal is 25
percent energy generated from renewable sources by 2025. In
Alaska, if we were able to provide rural Alaska with 25 percent
renewable energy for free, their energy bill would still be
unsustainably expensive. Alaska--energy is a fundamental
component of any economy. 25 percent renewable, 75 percent
conventional, but 100 percent affordable. Growing our economy,
creating jobs and opportunity for people, that should be our
mission. The president's 25/75 target is bold, but it is
realistic. At least in Alaska it is achievable. Together we
must begin the journey that will complete our mission. Thank
you for your time.
[The prepared statement of Jim Dodson follows:]
Prepared Statement of Jim Dodson, President & CEO, Fairbanks Economic
Development Corporation, Fairbanks, AK
Senator Murkowski, thank you for your continual commitment to all
Alaskans and Alaska's energy needs, and please thank your follow
members of the Senate Energy and Natural Resources committee for their
willingness to learn more about our energy issues.
Alaska is blessed with vast energy resources. Beyond our
conventional non-renewable energy resources of oil, natural gas and
coal, Alaska is also blessed with tremendous renewable energy resources
in the form of water, wind, geothermal, solar and bio-mass--renewable
resources that could provide for the Alaskan people's energy needs
virtually indefinitely. Unfortunately these renewable energy resources,
most within easy reach of all Alaska communities, have been woefully
underexplored and underdeveloped until only recently, while Alaska's
vast conventional energy resources, particularly oil, though they have
been a boon for Alaska's State government, have proven a drain on most
of Alaska's citizens and most Alaska communities.
Alaska is a sparsely populated State: there are only 680,000
Alaskans. Our communities and our people are spread across an immense
State that covers more than 660,000 sq. miles. This makes the
distribution of goods and services, like heating fuel and electric
power, expensive and challenging. Over 50% of all Alaska homes are
heated with fuel oil. Home heating accounts for 67% of Interior and
Rural Alaska's energy cost. According to a State of Alaska survey
conducted in June of 2007, Interior Alaskan residents were paying an
average of $2.47 per gallon for fuel oil and Rural Alaskans were paying
an average of $6.25 per gallon for the same product. Since June of 2007
the price of crude has, at one point, more than doubled. Likewise,
because oil is used widely in Interior and Rural Alaska to fuel
electrical generation, electric rates, particularly in Rural Alaska,
can be higher by a factor of twenty or more than in localities with
access to a more diversified energy mix including natural gas,
hydroelectric and coal. It was reported in the Anchorage Daily News
that 20% of Rural Alaskans are paying 47% of their income for energy
costs, while that same group living in Anchorage are paying 9% of their
income for energy. Because of this, and the crushing effect it is
having on their economies, many Rural residents are leaving their
communities; communities that have existed for hundreds of years are no
longer sustainable because of the cost of energy.
For Interior and Rural Alaskans living in a winter Arctic
environment, simply turning down the heat at 40 below, or turning off
the light when the sun only shines a few hours a day, to save money is
not an option.
Alternative and renewable energy sources can be part of Alaska's
energy solution, but they are not the entire solution. Affordable,
reliable and sustainable alternative energy will take time, research
and investment to accomplish America's goal of 25% energy from
renewable sources by 2025. As we move towards alternative and renewable
energy sources we must not forget, that even if we accomplish this
ambitious goal, we still must find solutions to deliver conventional
energy to all Alaskans so that the remaining 75% of their energy usage
is affordable--25% renewable, 75% conventional but 100% affordable.
The community of Fairbanks has taken a leading role in developing
renewable energy sources for Alaska. Lead by the Fairbanks Economic
Development Corporation and its' think tank organization, the Interior
Issues Council, the Fairbanks community has promoted energy issues from
conservation, to bio-mass, to energy from municipal waste, to instate
use of natural gas, to hydro-electric power generation, to a biomass/
coal to liquids project.
All of these initiatives present opportunities but also face unique
challenges.
When working on Biomass projects we found that, though the resource
potential of the Fairbanks community--including woody biomass, crop
slash, processed timber residue, land clearing & fire mitigation
material and municipal solid waste--was substantial, only municipal
solid waste was currently at a stage where it might be immediately used
for energy production; being readily available in volume, and already
economically collected and transported. For other biomass resources,
outstanding questions regarding their true abundance, chemistry,
agronomy, cultivation and reforestation, along with economic systems of
harvest and transport, would all have to be answered before they could
move to the type of commercial scale production required for sustained
industrial use.
Alaska has vast forest lands and, on its face, its forest resource
potential is immense. However, Alaska lags far behind other States in
accurate and up to date Forest Inventory Analyses. Neither the Federal
Government nor the State of Alaska have adequately invested in
necessary forest inventories. Surveying for forest type and tree
species using on-ground techniques is critical for any sustainable use
of biomass as an energy resource. Research needs to be funded that will
link ground-truth data to remote sensing data allowing us to cut future
costs for continuing inventories and provide a more complete biomass
inventory of the State of Alaska.
Also, just as a birch is different from barley, the energy output
of differing plant species can be radically different. Understanding
the Btu output per volume of individual indigenous or introduced plant
species is critical both for estimating the energy potential of
existing forests and for determining the best foliage to plant in its
place once those existing stands have been cleared. Parallel to this is
the necessity for ascertaining the growth rates of different species
under varying conditions and varying regimes of fertilization and care.
An economic system for harvesting the biomass must be identified. All
this must be done in a way that allows for the economical transport of
the harvested biomass from field to facility--producing more energy for
use than is consumed in production and transport. It is only with this
type of information in hand that we can optimize biomass cultivation
and name it truly a sustainable energy resource. Therefore, research on
species selection for Btu output, regeneration, harvest, transportation
and reforestation needs to be funded.
When working on a waste to energy project we found that the
existing commercial technologies were not scaled to be economic for
smaller communities. Communities such as Fairbanks, with just less than
100,000 residents, and all of Rural Alaska, cannot afford the power and
heat generated from what waste to energy equipment is currently
commercially available. Research, development, testing and
demonstration must continue to allow waste to energy projects to become
a viable part of the energy solution for a small arctic community.
In December of 1958 an ad in the Fairbanks Daily News Miner read:
``Coming.Natural Gas for Fairbanks, Natures Perfect Fuel for Homes and
Industry!'' As you know today, more than 50 years later, that fuel
source is still ``coming''. With only 680,000 residents, Alaska is not
a large enough market to attract private investment in a gas line
solely to service Alaska markets. That ``perfect fuel'' that could
reduce all Alaska's energy cost--that should be the fuel that Alaska
communities use for 75% of their energy needs, that would contribute to
the reduction of Alaska's CO2 footprint, that can eliminate
Fairbank's PM2.5 issues--is no closer today to Fairbanks or the
majority of Alaska than it was 50 years ago. Conventional thinking will
not solve this problem; simply hoping for private industry to make
natural gas available to all Alaskans at an affordable price will not
reduce our energy cost, meet EPA's air quality guideline or reduce our
CO2 emissions. Innovative thinking and bold leadership from
our National and State officials is needed to make natural gas
available to all Alaskans; and it is needed NOW.
The first license request to build the Susitna Dam project was
submitted to the Federal Regulatory Commission in 1984; that
application was dropped within one year when the price of oil dropped
and energy was perceived to be cheap. Hindsight tells us that the
decision to withdraw the Susitna application was wrong; energy produced
for crude oil is not cheap and our 1985 decision to not proceed with
that project has contributed to today's high energy costs, increased
CO2 emissions and, possibly, accelerated global warming.
Building Susitna Dam is a long term project; it is not an answer to
today's staggering energy costs but it is an answer for future clean
energy needs and today is the time to restart the Susitna Dam project.
In 2008, the Fairbanks Economic Development Corporation contracted
with Hatch Ltd for a high level engineering and feasibility study of a
Biomass, Coal and Natural Gas to Liquids facility. This facility would
take underutilized, low value Alaska resources--biomass and coal--and
transform them into ultra clean, high value liquid fuel products like
jet fuel, arctic grade home heating fuel, virtually no-sulfur road
diesel and naphtha. But more than that, the facility would establish
Interior Alaska as a major producer of synthetic blended liquid fuels
for the military, firmly anchoring Alaska military, 25% of our economy,
to Alaska. This project could also be a critical base load consumer for
an In-State Natural Gas pipeline. Additionally according to a white
paper written by Dr. Paul Metz of the University of Alaska Fairbanks,
basing his analysis on the 2005 U.S. Department of Energy report, there
is strong indication the CO2 produced by such a facility
could be valuable as a miscible injectant in Enhanced Oil Recovery--
sequestered, while at the same time allowing for the production of up
to 12 Billion extra barrels of safe, secure, domestically produced
North Slope crude from existing fields.
Alaska is uniquely positioned to help transition America to a new
energy future. No other people and no other State in our Nation are
more reliant on energy for survival. No other people are more
vulnerable should we fail to succeed than the people of Alaska and,
therefore, no other people have a more vested interest in seeing that
these new and innovative technologies work--we need them to work. No
other State has such a wide diversity of renewable, sustainable fuel
sources, in such enormous abundance, than Alaska and, therefore, no
State is better positioned to drive the research on new energy
technologies--if you create it, Alaska can power it. No other State has
such a wide range of temperature & climatic extremes, is as hard or
unforgiving, as Alaska and, therefore, no State is better positioned to
serve as the test bed and proving ground for new energy technologies--
''Alaska Tested, Alaska Tough'' resonates for a reason; if you can make
it work here, you can make it work anywhere.
Having helped perfect these systems--simplifying, hardening and
proving these technologies--Alaska will have acquired a body of
experience and expertise that is itself highly valuable and eminently
marketable--allowing it to remain not only an exporter of energy
resources but an exporter of energy knowledge, long after its
conventional energy resources have been depleted.
It is unfortunate that the national discussion on Energy is often
dominated by advocates of the extremes--those who say we can continue
on forever with business as usual or those who say we must chuck
conventional energy sources and move wholesale to renewable energy.
Alaska and America need both renewable and conventional energy. The
President's goal is 25% of energy generation using renewable sources by
2025. That goal leaves 75% of our energy coming from conventional
sources. We must not forget that even if we were able to provide Rural
Alaska with the 25% renewable energy for free their bill would still be
unsustainably expensive. Energy is a bedrock component and fundamental
underpinning of any Economy. ``25% renewable, 75% conventional but 100%
affordable''.protecting our economy while we advance it, creating jobs
and opportunities for people--should be our MISSION.
The journey of 1,000 miles begins with the first step and we will
do ourselves a great service--greatly improve our chances of reaching
our destination--if we simply accept that there probably aren't any
short cuts; we will have to walk every step of the way. This
recognition is inherent in the President's 25-75 target. It is bold,
but it is realistic and, at least in Alaska, it is achievable. The
experience of the Fairbanks community and Fairbanks Economic
Development Corporation regarding energy--facing challenges but seeking
opportunities, encountering barriers but working to overcome them,
stumbling at times but always, always moving Forward--is a trail that
must taken but together we can reach our destination.
Senator Murkowski. Thank you, Jim. I appreciate your
testimony.
Doug Johnson, welcome.
STATEMENT OF D. DOUGLAS JOHNSON, DIRECTOR OF PROJECTS, ORPC
ALASKA, LLC, ANCHORAGE, AK
Mr. Johnson. Good afternoon. To those of you that aren't
Alaskans, welcome to Alaska. Thank you for taking your valuable
time to hear our testimony today.
I'm Doug Johnson, the Alaska projects director for Ocean
Renewable Power Company. Our company is currently developing
two projects here in Alaska and one in Maine. Our project in
Maine is a tidal energy project in Western Passage, on the
American side of the Bay of Fundy. Our projects here in Alaska
are a tidal energy project in Cook Inlet adjacent to Anchorage
and a river energy project on the Tanana River about 100 miles
from here in the community of Nenana.
My great-grandfather came to Alaska in the gold rush. His
cousin was one of the Three Lucky Sweeds that made the original
gold strike in Nome. Today, like those pioneers of the past, a
new generation here in Alaska is pioneering the development of
the renewable energy industry.
Never before has there been a greater opportunity for new
sustainable economic development here in Alaska and across our
country than today. The transition to low or no carbon
renewable energy is inevitable. As the climate data is telling
us, it's needed sooner rather than later.
Currently in the arena in marine hydrokinetics, the
Europeans are the world leaders. Fortunately it is still early
in the game and we have the opportunity to leap-frog the
Europeans using our native innovative abilities. If we don't
take advantage of this opportunity, it will be another loss of
stature for the United States in the global arena. More
importantly, a loss of new jobs in a key emerging industry. The
world looks to the United States as a leader in innovation, and
we have the unique opportunity to demonstrate our leadership
once again.
To take advantage of this opportunity, our industry needs
your help now. As a fledgling industry here in Alaska we see
four key road blocks that government can remove. Without this
help, we will not be able to realize the environmental and
economic promise of marine renewable energy.
Roadblock No. 1: Lack of Federal agency coordination. Lack
of timely coordination amongst the agencies wastes scarce and
valuable human and monetary capital, a luxury an emerging
industry cannot afford. We need agencies to be well coordinated
producing streamlined highly--high-quality development
processes.
Roadblock No. 2: Technology-stifling impact of baseline
data collection requirements for pilot projects. We are
spending a million dollars this year in Cook Inlet, with
agencies requesting we do the same or more next year without
ever having a device in the water. We believe that in Alaska a
year of baseline combined with the substantial available data
is adequate with the proviso that we continue extensive
monitoring with our devices in the water. This is the best way
to assess the potential environmental effects. If we find a
serious problem, our devices can be shut down immediately and
removed in days.
Roadblock No. 3: Increased Federal and State research role.
We need the Federal and State agencies to actively partner with
us as stewards of the public resource to assist in a more
fully--to assist in more fully characterizing our pilot sites
energy resources, physical and environmental and marine life.
Roadblock No. 4: Lack of continuity between pilot project
license and full commercial license. Presently there is no
clear pathway to go from a pilot project license to a
commercial project license. We propose the development of a
clear bridge from successful pilot to a commercial license.
I have included a detailed discussion of each of these
points in my written testimony, including our proposed
solutions. The time is now, the opportunity is before us, and
we in the marine renewable energy industry are ready to move
forward. With your help, our country can take the leadership
role in this exciting new industry. Thank you for the time to
speak with you today.
[The prepared statement of Doug Johnson follows:]
Prepared Statement of D. Douglas Johnson, Director of Projects, ORPC
Alaska, LLC, Anchorage, AK
Good afternoon and for those of you who are not Alaskan's welcome
to Alaska. Thank you for taking your valuable time to hear our
testimony today.
I am Doug Johnson the Alaska Projects Director for Ocean Renewable
Power Company. Our company is currently developing two projects here in
Alaska and one in Maine. Our project in Maine is a tidal energy project
in Western Passage, on the American side of the Bay of Fundy. Our
projects here in Alaska are a tidal energy project in Cook Inlet
adjacent to Anchorage and a river energy project in the Tanana River
about 100 miles from here in the community of Nenana.
My great grandfather came to Alaska in the gold rush. His cousin
was one of the ``Three Lucky Sweed's'' who made the original gold
strike in Nome. Today, like those pioneers of the past, a new
generation here in Alaska is pioneering the development of the
renewable energy industry.
Never has there been a greater opportunity for new sustainable
economic development here in Alaska and across our country than today.
The transition to low or no carbon renewable energy is evitable and, as
the climate data is telling us, it is needed sooner rather than later.
Currently in the arena of marine hydro-kinetics, the Europeans are
the world leaders. Fortunately it is still early in the game and we
have the opportunity to leap-frog the Europeans using our native
innovative abilities. If we don't take advantage of this opportunity,
it will be another loss of stature for the U.S. in the global arena
and, more importantly, loss of new jobs in a key emerging industry. The
world looks to the U.S. as a leader in innovation and we have the
unique opportunity to demonstrate our leadership once again.
To take advantage of this opportunity, our industry needs your help
now. As a fledgling industry, here in Alaska we see four key road
blocks that government can remove. With out this help, we will not be
able to realize the environmental and economic promise of marine
renewable energy.
1. lack of federal agency coordination
Lack of timely coordination among the agencies wastes scarce
and valuable human and monetary capital, a luxury an emerging
industry cannot afford.
We need agencies to be well coordinated producing a
streamlined high quality development process. D. Douglas
Johnson's Oral Testimony Thursday, August 20, 2009
Need to ensure that FERC Pilot Project process is
implemented fully, and that the NOAA and USFW staff cooperate
fully with its streamlined permitting procedures, designed to
empower testing of R&D technology in temporary, low impact
projects. Currently some Services staff resist cooperation with
Pilot Project process, insisting on baseline data and review
which is equivalent to full project review.
2. technology-stifling impact of baseline data collection requirements
for pilot projects
We are spending 1million $ in Cook Inlet this year with
agencies requesting we do the same or more next year before we
ever get a device in the water o We believe that in Alaska a
year of baseline combined with the substantial available data
is adequate with the proviso that we continue extensive
monitoring with our devices in the water. This is the best way
to assess potential environmental effects. If we find a serious
problem, our devices can be shut down instantly and removed in
days.
3. increased federal and state research role
We need the Federal and State agencies to actively partner
with us as stewards of the public resource to assist in more
fully characterizing our pilot sites energy resource, physical
environment and marine life
4. lack of continuity between pilot project license and full
commercial license
Presently there is no clear pathway to go from a pilot
project license to a commercial project license
We propose the development of a clear bridge from successful
pilot project to a commercial license
I have included a detailed discussion* of each of these points with
my written testimony, including our proposed solutions.
---------------------------------------------------------------------------
* Document has been retained in committee files.
---------------------------------------------------------------------------
The time is now, the opportunity is before us, and we in the marine
renewable energy industry are ready to move forward. With your help,
our country can take the leadership role in this exciting new industry.
Thank you for the time to speak with you today.
Senator Murkowski. Thank you, Doug.
Our final panelist this afternoon is Mr. Dennis Meiners.
Welcome.
Mr. Meiners. Thank you, Senator.
STATEMENT OF DENNIS MEINERS, CEO, INTELLIGENT ENERGY SYSTEMS,
ANCHORAGE, AK
Mr. Meiners. Senator, thank you very much for the
opportunity to speak with you and the committee today. My name
is Dennis Meiners. I'm the CEO of Intelligent Energy Systems,
and director of Power Corp. Alaska.
Intelligent Energy Systems is a project coordinator and
developer for rural energy projects. We work directly with
villages to develop appropriate solutions to solve energy
problems. Power Corp. Alaska is an integrator and advanced
control system provider.
But what I'm here to talk to you about is the group--the
Chaninik Wind Group, and our Chaninik projects. I have been
working in wind-diesel for the last 15 years, 10 at the Alaska
Energy Authority. When it came to renewables, we were looking
at using renewables to decrease dependency on diesel fuel at
the Energy Authority.
I think that there are three truths that are--or 3.5 truths
that are self-evident about rural energy. The first one is that
we must--there's no choice, we must end the dependency on
fossil fuels. Two, right now with the current tools we have, we
can decrease the use of fossil fuels by 40 to 50 percent in
over 100 villages based on wind. That's not just for
electricity, but that's for heating fuel, transportation, and
electricity. The third truth is that village wind heat--I'll
call it village high-penetration wind heat--is really a pathway
to our national energy future.
Now, some people may laugh at that, but we've heard from
other panel members that villages are proving grounds for the
integration, stability, and management of high levels of
renewable energy. That's the truth. The 0.5 truth is wow,
Bernie, I agree with Bernie.
What we're doing in the Chaninik Group is a group of four
villages between Kwigillngok, Kipnuk, Kongiganak, and
Tuntutuliak at the mouth of the Kuskokwim River. They have a
very good wind resource there. Their goal was to combine as a
group to build wind-diesel systems to make the communities more
self-reliant.
We have three projects underway. Each of those projects has
about one kilowatt of installed capacity per resident. We're
taking that energy--that's a lot of wind power in relation to
the population and the electric load. In fact, at most times
the wind power will provide more energy than is needed to meet
the electric load. That excess energy will be stored in thermal
storage units in individual homes to decrease heating costs.
One of the first things we did was to do an energy survey
to find out how much energy individual homes were using, and
where there energy budget was being spent. What we realized
early on was that although electricity is expensive at about 65
cents a kilowatt hour, the real impact on a household was
paying the heating bill. You can have 1,000 square foot house,
and they may have a heating bill that's 6- to $8,000 a year for
a family that's maybe--has an income of around $40,000 total.
Then when you look at a subsistence lifestyle that requires you
to use outboards and snowmachines to go gather your food, and
gasoline is expensive, what we see is that probably two-thirds
of a home energy budget goes to heating fuel, and maybe 15
percent goes to electricity, and the rest goes to
transportation.
So the major problem that we're trying to address is heat,
we're--and when you look at the wind, the wind resources
available, and when you need the heat, it's when the wind
blows. Most of the wind blows at night in the wintertime, so
you need to store it. So we're taking--we have installed excess
wind capacity. We take that excess wind, and we store it in
individual thermal devices in homes. These devices are about
the size of a Toyo Stove, which is a common heating appliance
in rural homes. It contains bricks that heat up to around 1,200
degrees. Those bricks store the heat, and they're used
throughout the day.
We estimate that with our current projects we can only
provide for about a 50 percent heating fuel displacement in a
quarter of the homes. What we see in the next phase of projects
in--we're looking at a project in Kipnuk where we would like to
go to provide three to five kilowatts of installed wind
capacity per resident and displace a total of 50 percent of the
heating fuel and the fuel used to generate electricity in the
entire community.
We have to innovate with wind power. Current wind systems
that are going in now have about one-third of a kilowatt of
installed capacity of wind per resident. The energy produced
from that--from those--from that wind is used to displace fuel
at the powerhouse only. What we see is that that's not a
solution. When you install a small amount of wind power, say
one or two wind turbines, the economics don't favor a scaled
construction effort to drive the individual cost of--per
kilowatt down, and also the systems don't produce enough
electricity to make the maintenance operations economic.
If we put in large wind turbines in small communities and
we focus on displacing the major portion of fuel, which is used
for home heating, that changes the entire economics of
renewable energy in rural Alaska. First of all, you're no
longer sending dollars out of the community to the fuel
companies. You're keeping those heating dollars in the local
pockets of the residents. Too, we can sell that using advanced
metering and control systems with grid stability. We can sell
that electricity to a resident for at least 50 percent of the
cost of the heating fuel. So not only have you reduced the
heating cost to the consumer, but you've also increased
revenues to the local utility.
So the Chaninik Group was formed with a focus on 100
percent displacement of fossil fuels with renewables. Now
that's a long-term goal, but our short-term goal, it's in the
church of the here and now. We're doing hand-to-hand combat
with the technologies that we have, and we know that we can get
to 40 to 50 percent. Now, if the Chaninik Group is successful,
then that model should spread to at least half of the villages
in Western Alaska.
I think that if we look at wind not as supplying
electricity, but if we look at the whole energy picture in a
community, there's solutions here. Those same solutions apply
across the Nation. Because if you look at wind--the wind
resources available in the Midwest, there's a lot of excess
wind at night. So the same wind heat storage solution is
applicable throughout the country. The same backbone, the same
control backbone, the same metering backbone that has to go in
to manage that wind energy separate than diesel-generated
electricity is the same backbone that's needed to provide
lower-cost electricity or use renewable types of energy to
provide power for plug-in vehicles.
So the Chaninik Group, we see ourselves sort of as the
little gnat out there that's annoying the tail that wags the
dog. The big dog is the electric--the big boys with the big
wind turbines and the big oil companies and the--you know, the
major energy suppliers. We need solutions that are applicable
for us now. We're pioneering those. We think they're going to
be valuable for everyone.
I know this is a national sort of a--a national issue. I
just want to say that there are a lot of other small companies
and small efforts across the country that are helping us. We
have partners in South Dakota, North Dakota, North Carolina,
Vermont. We're encouraging new--new wind manufacturers in
Arkansas, we're buying software and engine generator controller
parts from across the--from Colorado and Michigan, all across
the country. We need the helps of--we need the help of many,
many small businesses to assist our efforts. So this is not
just an Alaska effort, this is a--this is a must for Alaska,
but it's also important for the rest of the country.
So thank you, Senator, for the opportunity to speak today.
[The prepared statement of Mr. Meiners follows:]
Prepared Statement of Dennis Meiners, CEO, Intelligent Energy Systems,
Anchorage, AK
abstract
The Chaninik Wind Group was formed in 2005 by the villages of
Kongiganak, Tuntutuliak, Kwigillingok, and Kipnuk with the objective of
effectively capturing the wind resources of Western Alaska to foster
self-reliance.
The residents of these communities are completely dependent on
fossil fuels, and can spend up to $8.00 per gallon for heating fuel,
and $0.65 per kilowatt hour for electricity. Diesel fuel is needed to
generate electricity to light and heat homes. Gasoline at $7.00 per
gallon powers outboards and snow machines needed to gather food. Energy
accounts for 25% of a typical household budget, which leaves little for
food, health care, clothes and the necessities of supporting a family
or community. Small communities can't survive without significantly
reducing dependency on fossil fuels.
Today Chaninik is in the beginning stages of implementing village
wide wind-heat smart grids, designed to displace up to 50% of all the
fossil fuels used for heating, power generation and transportation.
Success of these projects reflects national goals of reducing
dependency on fossil fuels, lowering energy costs, and improving the
economic and environmental health of the Nation. The Chaninik projects
are important because they are directly and rapidly addressing the
technical challenges of stabilizing energy grids while effectively
managing large injections of wind energy. These are challenges that we
all need to address if we are to have a cleaner, stronger, safer
country.
wind heat smart grids for alaska
Electrical delivery in rural Alaska consists of over 170 isolated
diesel grids, spread across a geographic area larger than the States of
California, Texas and Montana combined. These communities are isolated
from each other, unconnected by electrical interties, or accessible by
roads. According the estimates by the Alaska Energy Authority, 100 of
these communities have wind resources sufficient to generate
electricity. Wind energy has the potential to displace 50% of the
diesel fuel used for heating and power generation. This level of wind
penetration would lower residential energy costs, increase revenues to
local utilities, and stabilize local economies, by keeping dollars in
the community and creating local jobs.
To achieve this objective, village energy systems must move from
current installed wind systems which represent \1/2\ kW of installed
capacity per resident to systems with 3 to 5 kW of installed capacity
per resident. The hybrid wind diesel power systems must be designed for
grid stability at wind penetration rates of 400% or more, and with
ability to capture, store and manage excess wind capacity. In the case
of villages, distributed electric thermal stove storage, smart metering
systems, and flywheel grid stability systems will be used to achieve
these objectives. This same model could serve equally well for the
implementation of plug-in vehicles, or widespread use of wind heat
across the lower 48 States and Hawaii.
In rural Alaska, there is a similar match between wind power and
the need for heating fuel. Wind energy represents the single most cost
effective and widely applicable source of renewable energy today. On
windy winter nights, wind generation will drive off-peak electric rates
down, making wind assisted heating the low cost heating option. Due to
the variable nature of wind, as larger and larger proportions of wind
are added to the village power system, sub second power fluctuations
must be stabilized. This is done by rapid injection and absorption of
real energy with a flywheel energy storage unit, which allows for
smaller and smaller amounts of diesel generation as excess wind energy
is stored for later use.
Increased use of Electric Thermal Storage (ETS), referred to as
Wind Assisted Heating, is one tool that is ready now to allow the
electric grid to productively use higher percentages of renewable
energy. This will ensure the new investment in wind generation is fully
utilized, minimizing carbon emissions and keeping heating costs low.
While the potential exists for the widespread and significant
displacement of diesel fuel, much of the wind resource occurs at night
in the wintertime. In the village systems, this wind energy will be
stored in thermal stoves located in each residence. In another
application the thermal stoves could be substituted for a plug-in
vehicle. Heating requirements are greatest when the winter winds blow,
and this method is estimated to lower home heating costs by 50% with
the revenues flowing into the village owned utility rather than leaving
the community with the fuel company.
chaninik wind heat smart grids
The Chaninik Wind Group has begun construction of three medium size
Wind-Heat Smart Grids (a diagram* of the system is below)
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* Graphic has been retained in committee files.
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Each system is designed to integrate, capture and store large
amounts of wind energy whenever it is available, and use that energy
cost effectively to displace diesel fuel usage. Each system will be
equipped with a smart metering system to dynamically manage, price and
account for the sale of wind energy separate from diesel, so that the
customer can participate in the cost savings. The wind turbines,
integrated control system, and flywheel energy storage module that
rapidly injects and absorbs power fluctuations hold the grid stable as
wind is made available to charge thermal stoves in homes and community
buildings.
The three medium size systems with 1.5 kW of installed wind
capacity per resident are underway in Kongiganak, Kwigillingok and
Tuntutuliak. These systems only have enough wind capacity to provide
wind heat for 1/4 of the homes, while still displacing 40% of the fuel
used to generate electricity.
A fourth system proposed for the community of Kipnuk is based on
the installation of 3 kW of installed wind capacity per resident and is
designed to have sufficient wind capacity to displace 50% of all
heating fuel used throughout the community for heating and power
generation. This system is likely to be the model for the rest of rural
Alaska.
The ability to utilize high proportions of wind energy versus
fossil fuels requires the same technical platform used in each Chaninik
community: integrated controls, flywheel grid stability, smart
metering, and appropriate energy storage devices. The only differences
are the amounts of installed wind capacity and the extent of the
metering and energy storage devices. The principles and methods being
pioneered by Chaninik can be applied on larger grids and more extensive
energy systems with thermal energy storage and plug in vehicles. For
Chaninik the system is designed to maintain high fuel displacements for
power generation even at lower wind speeds, because of the capability
of the flywheel energy storage systems and reduced need for heating.
cost savings: thermal storage vs. batteries
A residential or small commercial heating system costs about $30
per kWh installed compared to a recent installation of a 7mWh Sodium
Sulfur (NaS) Battery at approximately $150 per kWh. Electric Thermal
Storage systems are more cost effective because they work like the
thermal battery with the heating system included.
Thousands of electric thermal systems have been installed across
North Dakota, South Dakota, Iowa, Minnesota and Wisconsin to take
advantage of off-peak rates available from coal fired power plants.
These systems are used as a primary source of low cost heat. Increased
installation of wind will enable more wide spread use of Wind Assisted
Heating systems.
low carbon footprint and low cost of operation
Opportunities exist to pair wind assisted electric thermal energy
storage units with air source heat pumps (ASHP). This combination
offers the possibility of displacing even more heating fuel with wind
energy reducing the carbon footprint of the home heating system as more
renewable energy is added.
dynamic demand response
Dynamic device control and pricing through advanced metering is
needed to enable devices such as electric thermal storage devices,
plug-in vehicles, water heaters, and air conditioners to respond to the
availability of wind energy. Maximizing wind resources involves being
able to quickly respond to the availability of wind by providing
pricing options for customers, while at the same time maintaining power
quality through voltage and frequency control. The combination of
flywheel grid stabilization, integrated generation control and advance
metering are needed to manage the system.
the regional smart grid
When completed, the combined four village project will have created
a series of Wind Diesel Smart Grids that are linked together with a
digital control and metering network. Advanced controls, metering, and
communications tools represent a scalable backbone for extending this
network to other communities, in the Chaninik region and throughout
Alaska. The Smart Grid Network represents significant costs savings
through remote technical and administrative cooperation.
Wind Diesel Hybrid Smart grid tools include: supervisory generation
and distribution controls, advanced metering infrastructure, wind
turbines, thermal storage devices, and grid stability and control
methods, in this case flywheel energy storage.
conclusion
The success of the Chaninik wind group is both necessary for
villages to survive and vitally important to this country. These
projects lead the way to new, more productive and more cost effective
uses of wind energy. Some examples of the value they create include:
1. Expanded use of wind power for heating, power generation,
and transportation.
2. Implementation of the smart grid tools to improve
management and link communities together.
3. Stabilization of local economies, through creation of
jobs, and substituting local renewable resources for fuel
purchases.
The successes of these projects can have an immediate impact in
Washington State, Wyoming, Kansas, Indiana, Minnesota, Wisconsin, New
York, California, Iowa, Texas, and Colorado.
Progress in Rural Alaska is only possible with small business
partners across the Nation, here are just a few:
North Dakota--Electric Thermal Storage, Steffes Corporation,
Dickenson North Dakota
South Dakota--Transformers, T&R Electric Supply Company:
Training: Airstreams Renewables, Inc., turbine supply and
maintenance; Energy Maintenance Services, Howard South Dakota
North Carolina--Triangle Software and Elster meters
Washington State--Pacific Northwest National Labs, Fluke,
Applied Power and Control, North Coast Electric, Lynden
Transport, Horizon Lines, Oak Harbor Trucking, Outback
Inverters, Itron, Weyerhaeuser, Schweitzer Engineering
Laboratories, Costco
Arizona--Sandia National Labs
Arkansas--AWE Windturbines
Colorado--National Renewable Energy Laboratory, Woodward Ft.
Collins, Sustainable Automation,
Vermont--Northern Power Systems, Draper laboratories
Michigan--National Instruments, IXXTP.
Senator Murkowski. I appreciate your testimony. Dennis, how
much are the thermal units if it's in somebody's residence?
What does the unit cost right now?
Mr. Meiners. A thermal unit is probably around $2,000. But
in rural communities, because the electric system is so--may
not be up to code, some code improvements have to be made, so a
typical installation for one of these systems is--could be 3-
to $4,000.
Senator Murkowski. You know, the conversation that we've
had with this panel particularly, whether it's geothermal,
wind, biomass, ocean tidal, or wind opportunities, wind-diesel,
I think we recognize that unless we can be building things to
scale to allow for the efficiencies in small communities,
wonderful technology is happening all over out there, but if
you can't figure out how you make it cost efficient in a
village, cost efficient in a smaller community where, you know,
we're not hooked into anybody else. One of the discussions that
we haven't had which really gets people a little bit agitated
when I bring it up because it's--it is something that we've got
to deal with, if you're not living right where the energy
source is, you got to move it to get it to the people, and it's
al--the big issue about transmission, which, on a national
scale, is something that, you know, some of my colleagues just
don't even want to go there, because then we're really talking
about some controversial issues. But I think it's important to
recognize that we're going to have to figure out in this State
how we can take a small community like Kipnuk, which, you know,
maybe has 350, 450 people there--800 in Kipnuk? OK. So I'm down
by half. But still, you've got an 800-person community, and for
us to go in and say well, we're going to help you reduce your
energy costs, but the cost of doing so is absolutely
prohibitive, we haven't helped them out. So getting things to
scale.
The project that you described, Dennis, in how we can
really be looking to the whole energy picture and how we reduce
those costs is, I think, something that we need to key into
with--particularly in this State. I was in Newtok yesterday,
and they're moving that village to another spot on higher
ground on Nelson Island. There's four different villages on
that island, and the question now is how they tie into one
another to utilize some of the energy opportunities that exist
out there. But again, this is something that we haven't had
much, if any, discussion here in these two panels this morning.
But I think, again, we recognize that our geography makes it
complicated and difficult, but we've got to be looking to how
we deal with the transmission issues as well.
As I mentioned with our first panel, I've got a whole host
of questions that I will ask to each of you in writing and
would ask for your cooperation so that we can include them as
further part of the record. But I want to just kind of throw
out to each of you--and I'm watching my watch, Bernie; I think
we've got about 10 minutes before we got to cut it off here so
we can move on to your program? Is that about right?
Mr. Karl. You got all the time you want, Senator.
Senator Murkowski. All right. I'm not going to mess with
the schedule here. But from your perspectives, whether it's in
geothermal or wind or ocean or biomass, how can we, from the
Federal level, better help to facilitate some of the smaller-
scale projects? Because they're not nearly as interesting and
intriguing on paper. If you're not supplying power to large
regions, large numbers, how can we better help to facilitate
that?
You know, Bernie, you have made your--the Chena Hot Springs
here, it's a self-contained unit. You're doing everything for
this little community. But again, when DOE is looking to move
grants, you're competing against requests that look pretty good
on paper in terms on supplying and meeting the needs. Now, the
Fire Island project, you get that pulled together and the
ability to offset some of our energy costs, particularly as we
see costs rising in the future as we see the reserves coming
out of Cook Inlet dwindling, we've got to be addressing that.
How do we better facilitate some of these smaller-scale
opportunities? I throw that out to any one of you.
Senator Murkowski. Bernie, go ahead.
Mr. Karl [continuing]. To start with, Senator, there's a
tremendous opportunity right now with the administration and
the money that--I don't know where you're getting it. I guess
you're printing it because----
Senator Murkowski. That's another hearing for another date,
I think.
Mr. Karl. But with that being said, right, wrong, or
indifferent, the opportunities are tremendous right now. I
think it's in reinventing ourselves, as I stated once before,
but in Fairbanks, Alaska, right now with the help, again, of
United Technologies, and with the help of Alaska Energy
Authority, I can tell you the Alaska Energy Authority has been
a tremendous--a tremendous resource for the State of Alaska. It
has tremendously good leadership who gets it, who understands
that there has to be an energy policy. They are helping Chena
Power in Fairbanks, Alaska, to build a 500 kW power plant that
will be running with no smokestack. It will be the first
commercial power plant. It will scaled to work in any village
in Alaska. I can assure you that any village in Alaska can be
self-sufficient for all of its fuel, for all of its energy, and
for all of its food in the next 10 years if it wants to be. You
can be thankful to United Technologies, and you can be thankful
to AEA for believing in the project and not being a hinderance.
But you see, one of the biggest things was, well, you got
to get this permit and you got to get that permit. Let's work
at not having permits.
Senator Murkowski. I think the ocean energy guys would like
that. I know that for a fact.
Mr. Karl. But let me tell you--let me tell you how you work
at not having permits. You have to imagine it again. The Jay
Florida project was going to fail. You want to know why--$1
million for getting the permits, and another year of time. So
Quantum Resources said forget it, we didn't buy into that. Mr.
Karl, we told you our share was $348,000, now our engineer says
another million for permitting, we're not going to do the
project.
So what do you do? You come back to Alaska and you tell
them OK, we'll do it with no permits. They say, yeah, right. We
made it portable. We have no emissions. It's legal height, it's
legal width, legal weight for all 50 States. You have to look
at what you can do. In Fairbanks, Alaska, we're building a new
biomass plant with no smokestack. I don't need to worry about
air permits because I don't have any emissions. I don't need to
worry about disposal permits because I'm not going to dispose
of anything. It's called biomimicry. You mimic what nature
does.
The Native populations of Alaska have been doing that for
centuries. They've lived off of biomass. They've used their
environment for 10,000 years. For 10,000 years they've used
their environment. Cold is a wonderful thing if you use it. So
is heat, it's a wonderful thing if you use it. What if we
combine the two? What if we combine them? We can make a
tremendous amount of energy on a Delta-T of just 100 degrees.
With a company like United Technologies to help, it's pretty
easy.
Do we need the Department of Energy's help? Absolutely.
Absolutely. Because when you're doing all of these so-called
experimental things, there's a lot of risk. I've never, ever
considered risk. Now, maybe I should. My wife tells me all the
time, she says, you are no philanthropist. I said, some day I
want to be. So--oh, she's like having a 50,000 pound anchor on
the old rear end. But I need her, obviously.
So with that being said, these opportunities right now are
real. It takes--as Senator Stevens always said, money is going
to evaporate for Alaska. We need to work together. There's
going to be less funds. So you need the Federal Government, you
need Alaska Energy Authority, you need the university, you need
private sector, you need United Technologies, you need
everybody working together as a synergy, as a synergy. You can
get a lot done. You have to be willing to work together and
share these ideas.
I think that is the future for renewable energy. I don't
say there's a silver bullet, I say you have to use it all.
Storing energy is like a no brainer. The good Lord's been
storing energy his whole life. Right? Right in the earth. We
store energy all the time. It's ours to take, but to use it
wisely.
Senator Murkowski. I want to ask, too, a little bit more
about the permitting issue, because that's where we at the
Federal level--you say there's roadblocks out there.
Mr. Johnson. Yes.
Senator Murkowski. I think it's important for us to
understand how we can realistically remove or perhaps soften
some of these roadblocks. Because wonderful ideas on paper, but
if the government is saying, OK, we got a great energy policy
out here, we want to encourage all these renewables, and yet we
put these hurdles up in front of you that are either so
bureaucratically impossible or so incredibly expensive, we
haven't facilitated anything.
Mr. Johnson. Exactly. Thank you, Senator. I have an idea
for you. I think we should be pitching Alaska as the laboratory
for our country, the laboratory for developing renewables, and
the laboratory for developing a process to facilitate this. We
got an amazing innovation here. Just look around us and see
what Bernie is doing, look at what Dennis is doing out in
Western Alaska, look at what we're trying to do with the
hydrokinetics. It's happening. But what we have to be able to
do is facilitate the development of it. Yet that policy that's
there, the permitting processes that are there, what we need is
agency coordination. Because we can unleash the innovation that
we have if we can have the agencies work with us and sit at the
table and work through this and develop processes that don't.
Senator Murkowski. Do you feel that you do not have that
cooperation presently?
Mr. Johnson. We're working toward it, but it's a--it's
challenging because you've got people in, you know, different
places in the country physically, and you've got different
people in different sort of mind or thought processes or where
they're at in terms of their ideas around renewables and how
they ought to be developed. So it's policy and developing the
coordination between the agencies.
Like, in our instance, it's Federal Energy Regulatory
Commission, or FERC, and the folks at NOAA. You know, trying to
get NOAA and NMFS and FERC all working together so that we can
get the permit process moving forward in a way that makes sense
that we can participate, that doesn't bankrupt us in the
process.
Senator Murkowski. From the State perspective, do you feel
that there is greater ability working within--at the State
level?
Mr. Johnson. Yes, the State of Alaska has been fabulous.
This Alaska--our Alaska Energy Authority is a tremendous asset
to us here. Virtually everyone that I've met in State
government has been tremendously supportive of our efforts. I
know in renewables in general. So the staff's been great to
work with.
Senator Murkowski. We've got some issues with it, and I
think we heard a little bit of that from the first panel as
well. But I know with the Fire Island project, this is
something that has been in process for years, and it has been
the Federal Government, which has been the impediment, whether
it's the FAA issue. But it is--it really seems to be that the
stumbling blocks are at the Federal level, even though we have
put in place this huge initiative that we're going to advance
renewable energy in a meaningful and significant way.
Dennis.
Mr. Meiners. Senator, and on the permitting issue, I think
it's just--at least from the wind projects, if Federal money
comes in and you use Federal money for a wind project, it spins
you in a whole new parallel universe of permitting and agency
interest. In these recent renewable energy projects, it was
State funded. I think that there are certain agency
representatives who are just not well educated about the
impacts or the nonimpacts of these systems, say, on tribal
lands or in communities. So they tend to slow the process down
and try to spin it back into that whole permit process. So I
think there needs to be a clear dividing line between where the
jurisdiction is and where it isn't. They can say we have no
jurisdiction here and be able to do it very quickly. So that
would speed things up.
Mr. Johnson. Absolutely.
Mr. Meiners. Because there's a lack of ability to make
decisions there, there are new people, so there needs to be
some kind of reeducation, perhaps, at that level. Because I
have projects--the projects in the Chaninik area do not require
permits. You go to certain people, and they say, we don't have
any jurisdiction here, and other people say, oh, I think we
might have jurisdiction here, and so 6 months later they decide
that you don't. So I just think there needs to be maybe some
retraining on the permit level.
Senator Murkowski. Certainly from the jurisdiction
perspective, as we know, with the offshore energy issues,
there's a huge controversy and fight between the FERC and MMS,
and literally a process that took years to resolve, and, you
know, we're hopeful that, in fact, now it has been resolved and
that projects can be moving forward. But again, you've got good
substantive projects on the drawing board that can't advance
because of Federal agency issues that just shouldn't be there
in my opinion.
I am going to, again, submit a series of questions to each
of you, but I want to thank you for your contribution here at
this field hearing. I think it's been interesting to have a
little bit from the various sectors that are making some good
things happen within the State. If you don't--if you're not
excited about what our potential is for renewable energy in
this State, you haven't woken up yet this morning, because it
is real and it is vibrant and it's a terrific thing.
I want to close by reminding, not only the panelists, but
any of you who have attended today, that if you have comments,
if you wish to submit written testimony on any other Alaska
Renewable Energy projects or ideas that you might have, you can
submit them to the committee in writing. We will hold the
record open for 10 days for you to do so. You can send them to
the Committee on Energy and Natural Resources in Washington,
DC, or you can e-mail them to Chuck Kleeschulte, who is on my
energy staff here. Chuck's e-mail address--you can get it from
Chuck. But you can e-mail him, or you can also send it to my
Fairbanks office here. Althea St. Martin, who is standing up
taking the picture there, is located in Fairbanks. Her number
here in Fairbanks is 456-0233. She can get them to our
committee's Washington staff and get them included in the
formal record.
I want to acknowledge and thank the committee staff that
have joined us, both down from the Democratic side and the
Republican side. They helped to facilitate these field
hearings, and their advance work is greatly appreciated. So
Mike and Chuck, thank you very much. With that, we will
conclude.
[Whereupon, at 12:46 p.m., the hearing was adjourned.]
APPENDIX
Responses to Additional Questions
----------
Responses of D. Douglas Johnson to Questions From Senator Murkowski
general ocean energy
Question 1. Your testimony did a wonderful job of summarizing the
key issues that the federal government needs to consider to improve
marine renewable energy. I agree that there is a lack of timely
coordination among federal agencies, and that there should be a
streamlined permitting process between FERC, NOAA and USFW to get
projects into streams. Can you give more detail on exactly how you
envision such a permitting system to work once we get past pilot
projects, and into regular licensing of renewable plants? How do we
mesh such a system with the NEPA requirements for environmental impact
statements before licensing of significant federal actions?
Answer. A transition from the Pilot License process to a Commercial
License process has not been defined by FERC and is greatly complicated
by the conflicting statutory roles of the various Federal agencies
involved in licensing and relicensing of hydrokinetic projects. The
White House and Congress must assure that all federal agencies support
reasonably scoped studies that both allow for the rapid and successful
deployment of small scale FERC Pilot Projects and the subsequent
commercial project build out, particularly given that traditional
hydropower licensing regulations are being used for hydrokinetic
projects and the much larger expanse of the marine environment as
compared to traditional riverine systems. The White House Office of
Energy and Climate Change Policy, working with the Council on
Environmental Quality, Oceans Policy Committee, or other appropriate
senior-level management coordination group, should address and rapidly
resolve this issue in order to ensure that federal agencies coordinate
effectively to advance the FERC Pilot Project license process and the
development of marine hydrokinetic technology in order to protect the
environmental, economic, and security interests of present and future
generations of Americans. Ideally, a standard set of license conditions
could be developed to further minimize the time and expense involved in
Pilot Project Licenses and subsequent commercial build out of projects.
mms-ferc siting
Question 2. One issue facing the marine renewable industry is
getting rapid approval of permits for siting devices. While there has
been a memorandum of understanding between the Minerals Management
Service and the Federal Energy Regulatory Commission that hopefully
will speed up permitting it is not clear how it will work. What in your
view would be the best way to proceed to speed permitting and
environmental impact statements and reviews for ocean energy
permitting, if you have not already answered this from above?
Answer. We have a number concerns about the outcome of the
memorandum of understanding and the MMS process. Our concerns are major
as We believe the current MMS structure is unworkable from a number of
perspectives:
1. The structure is based on oil, gas and minerals industries
where the resource is ``extracted'' forever. Hydrokinetic
technologies ``use'' a portion of the energy but when the
devices are removed, the energy of the tides and ocean currents
continue.
2. Lease areas do not conform with the footprint needs of
alternative energy technologies and the process does not
provide for site control
3. The proposed pricing and revenue sharing make renewable
energy projects uneconomic and it is not a process we can
afford to pursue.
In summary FERC and MMS need to coordinate better to insure
projects are permitted in a timely, responsible manner.
ocean policy task force
Question 3. In August NOAA was in the State holding a hearing of an
Ocean Policy Task Force that is considering how to improve data
collection and conduct the science needed for environmental reviews for
ocean energy projects. One of the recommendations was that agencies
work with NOAA to close knowledge gaps and develop a single
clearinghouse of information on the effects of marine hydrokinetic
projects on fisheries and marine mammals to improve marine spatial
planning decisions? Do you have any other suggestions on what can be
done to improve and speed the planning/ approval process?
Answer. We agree that a central clearing house for environmental
information if designed and implemented properly, would help the
process; under no condition should the Ocean Policy Task Force
recommendations include a moratorium for ongoing projects; and we must
stop the abuse of our oceans by slowing CO2 emissions and
marine renewables can play a major role in this regard.
______
Responses of Gwen Holdman to Questions From Senator Lisa Murkowski
Question 1. General technology question.--I know that your center
has applied for a number of grants under the so-called federal stimulus
act. Can you talk more than you did in your testimony about them and
what types of areas should be where the government focuses its research
assistance? Where are the weak spots in our efforts to develop
renewable energy at present?
Answer. The Alaska Center for Energy and Power has been pursuing
federal funding opportunities as appropriate to our mission of meeting
State and local needs for applied energy research. In the past couple
of months, we have applied to:
1) DE-FOA-0000109.--Innovative Geothermal Exploration
Techniques. Our proposal was titled: `Validation of Innovative
Exploration Techniques at Pilgrim Hot Springs, Alaska', and
uses geophysical techniques designed for volcanology research
and applies them to geothermal exploration. We pioneered this
technique at Chena successfully, and think it could be expanded
to characterize other moderate temperature resources with a
discreet thermal surface feature.
2) DE-FOA-0000090.--Wind Energy Consortia between
Institutions of Higher Learning and Industry. Our proposal was
titled `Proposal to Expand the Wind Diesel Application Center
at the University of Alaska', and was developed as a consortium
of a large number of industry partners, the Alaska Energy
Authority, and Renewable Energy Alaska Project (REAP).
In addition to these two, we have submitted several other proposals
for both research and curriculum development. We have also been making
a significant effort to increase partnerships and projects with the
State and private sector. Half of our currently funded projects are
with private sector clients, and the majority of ACEP's funding (87%)
is from State sources. ACEP has averaged 3 proposals per month since
founded, and has had a success rate of 64% of proposals developed
ultimately being funded.
There have been 2 very significant challenges for ACEP in seeking
federal funding opportunities. First of all, we have repeatedly found
that the specific needs of Alaska do not entirely overlap the greater
research needs of the Nation. For this reason, many funding
opportunities are not applicable to the type of research we are most
interested in conducting. This has been a challenge for us, and also
for other research organizations focused on Alaska. It should be
recognized that Alaska has some unique research needs that are in some
ways more representative of 2nd and 3rd world countries than most parts
of the U.S. We frequently need to tailor our proposals to ensure we are
addressing the national research agenda, and this is often at the
detriment of the work we are best positioned to complete and that has
greatest relevance to the State. A perfect example is with the second
proposal listed above, the `Wind Consortium' funding opportunity. This
opportunity is specifically geared toward meeting a national goal of
achieving 20% wind by 2020, and focuses on development of large
turbines and wind farms that are not appropriate for Alaska. We
tailored our proposal to focus on energy storage, modeling and system
integration, and cold weather related research, but I think it is
unlikely to be funded. That is too bad, because no one is doing the
type of research with high penetration wind we can be doing in Alaska,
and Alaska can in many ways serve as a model for the lower-48.
idea for research assistance
Many States, including Alaska, have a tendency to not spend dollars
on applied research, especially related to energy. Funding is being
spent at the State level on projects, but often research is left to the
federal government and private sector. Perhaps one way to encourage
more research at the State level is to provide Federal match for any
State grant fund developed for the purpose of encouraging innovation in
energy and other industries--essentially an emerging technologies match
fund. This would decentralize some of the focus and stimulate
competition on a new level--to address the specific research needs of
individual States or regions, without the necessity of trying to tie
research objectives back to the country as a whole.
Question 2. Storing renewable energy--I know that you are
interested in working on the issue of how to make renewable energy fit
better into the grid. How you develop systems to better mesh diesel
generation, which is going to be around for a long-time in Alaska, with
renewables like wind and marine hydrokinetic. What should Congress and
the DOE be doing to help smooth out power production and reduce the
cost of backup power needed as renewable energy increases in its
percentage of generation in a utility system?
Answer. These ancillary issues are absolutely critical to long-term
grid stability (not to mention transportation applications), and is an
area where I think Alaska can position itself to play a leading role.
ACEP has a long history of working on the energy storage issue, and we
have an extensive database of manufacturers and projects. The problem
of energy storage is still a difficult challenge and is the type of
problem that may ultimately require a disruptive technology--a major
leap in innovation that perhaps is still on the drawing board--to truly
effect the necessary advancement. For this reason, I think it is
necessary to continue to invest in a suite of storage technologies at
different levels of commercial readiness (or non-readiness).
On the bright side, this is an area where Alaska can really play a
leadership role and be a place to demonstrate technologies at early
commercial stages. The issues we see in rural Alaska, and even the
larger population areas, mirror the types of challenges we will see on
our grids in the lower 48 as we push higher percentages of renewables
onto the limited infrastructures that exist.
For example, we are working with Kodiak Electric Association to
model their electric grid. We hope to develop a plan to include both
short and long-term energy storage in order to achieve 95% renewables
as a percentage of generation (wind, hydro, and diesel). We are working
with Sandia National Lab on this problem. They are interested in
working on Kodiak because it is a way to test models they have
developed for the lower-48 on a discreet, isolated grid. In addition,
we have been testing an advanced flow battery manufactured by VRB in
our lab for the last 2 years, and have developed proposals to test
additional ones as well. We are working with utility partners on the
energy storage issue, including Kotzebue Electric, AVEC, and Golden
Valley Electric Association.
It is really important to stress that Alaska already has some of
the highest penetration levels of wind in the Nation. The opportunity
this presents is significant, because many of the methods being
pioneered to deal with these issues are scalable to larger grids. The
National Renewable Energy Laboratory (NREL) has a wind-diesel testbed
in Colorado, which is somewhat defunct at this time. We are working
with their program managers to ramp up our capabilities here in Alaska
and develop a more modern testbed at ACEP, with real data from our
partner utilities used to test control and storage options and other
optimization strategies. We think this is important work (so does NREL
and our industry partners), but we need $4M to develop the facility.
That was the purpose of the `Wind Consortium' proposal we developed,
but I think it is unlikely to be funded because the focus was on larger
turbines and wind farms than are appropriate for Alaska.
Question 3. Cost of Renewables--As an engineer you have looked at
the cost of renewable energy versus fossil fuel use. Do you have
suggestions on how we make renewables economically competitive with
fossil fuels without having to provide continuing tax subsidies?
Outside of conventional hydro power and perhaps onshore wind, few
renewables are close at present in construction costs to gas-fired or
coal-fired electrical generation. What should we be doing to try to
close that cost gap?
Answer. One of the key points to understand is the difference
between capital costs and lifecycle costs. I think it is going to be
unlikely that the capital costs of renewable energy systems will drop
to the level of traditional fossil-fuel based generation any time soon.
This is largely due to economies of scale, the maturity of the
technology, and the fact that it is really tough to beat the energy
density you find in fossil fuels. But the capital costs are not the
important factor--the lifecycle costs are. On that basis, renewables
can often be quite competitive with fossil energy assuming that the
cost of fossil-based fuels will rise in the future (the Energy
Information Agency is currently predicting >$110/barrel average in 20
years). The trick is that we can't know for sure if, or how much, those
costs will increase. That means we can only guess at the long-term fuel
costs, and thus life-cycle costs, of the fossil-fuel based generation
whereas we have fairly good certainty for the renewable option.
When it comes to energy, subsidies of some sort seem to be the rule
rather than the exception throughout history. I have observed that as a
country we have often subsidized all sorts of energy production,
exploration, and development activities--both renewables and fossil
fuel. Other countries take the approach of taxing fossil fuel heavily,
thus making renewables more economically attractive on that side of the
equation. The critical thing seems to be to try and be consistent with
subsidies. Inconsistency reaps marginal benefits at best. For example,
the production tax credit here in the U.S. would be far more effective
had it been enacted for 10 or 15 years right from the start, rather
than being constantly renewed.
The bottom line is that renewable energy as a whole is a relatively
new industry, and as such, the economies of scale do not yet exist. If
we can enact policies to boost production and ramp up development,
eventually subsidies could be phased out. But in the short term, they
are probably needed if we want to transition away from dependence on
foreign oil. If done properly, subsidized programs can result in
significant public benefit--like the NASA program in the 1960's and
1970's. Think of all the different types of products that were an
indirect result of setting a national goal of being the first country
to reach the moon. If we make a true national commitment to wean
ourselves away from foreign energy sources, we can strengthen our
position as a country from a national security perspective, build long-
term infrastructure that will benefit future generations, and begin
moving toward the economies of scale needed to make renewable
technologies economic when compared to fossil fuels.
______
Responses of Jim Dodson to Questions From Senator Murkowski
general
Question 1. Jim you talked in your testimony about two projects,
the biomass, waste project to generate electric power for Fairbanks and
the biomass, coal project to produce synthetic fuels for use in the
Interior and for military use in Alaska. I personally support both
projects and certainly backed the $10 million grant to the Air Force to
study the latter project last fall--I just wish the money was being
spent as it was intended when the grant was approved by Congress. But
more generally, electricity in Fairbanks has become a real issue. At 22
cents per kilowatt hour it is far higher than other major communities
in the State are facing for power from natural gas, coal or hydropower
sources. Why do you feel that biomass will be a cheaper and more
dependable source for power and or fuel in the future for Alaska's
Interior?
Answer. My reference to biomass refers to the fact that many grants
are being offered, both through AEA and DOE for biomass heat and energy
generation. The problem is biomass mass is not currently being produced
for energy in any kind of commercial sense and neither the State nor
the Feds have done enough research on biomass inventory, crop selection
for biomass reforestation, harvesting or regeneration for it to be so.
All this needs to be determined before biomass is available for
sustained energy use.
As far as the CLT project, research suggests that, by using biomass
with coal in the gasification stage, the CO2 emissions can
be reduced by as much as 30%. Also, the direct combustion or, in the
case of CTL, consumption of biomass is considered carbon neutral. As
people are made to feel the ``cost of carbon'' in coming years, through
either direct taxation or the impacts of cap-and-trade, it is likely
biomass, still relatively under-competitive today, will become more so
in future.
I don't believe we are going to find a State-wide alternative
energy source, including biomass, that will be less expensive than
conventional energy and, as you know, many want to put money into
alternatives and forget about coal, oil and natural gas. I am not one
of them. I believe we must use both and phase in the one (alternatives/
renewable) as circumstance and economics cause us to phase out the
other.
follow up
Question 2. Given the shortness of time at the hearing I didn't
have the opportunity to talk to you about this, but I recently received
a letter from Lt. General Dana T. Atkins of the Air Force (Aug. 19th)
saying that the Air Force is ``enlisting the assistance of the
Fairbanks Economic Development Corp. in assessing local, State and
national supporting and opposing organizations to determine what their
core issues are and to develop strategies to ensure they are adequately
addressed.'' What is your understanding of what the Air Force is asking
of the FEDC and does it provide any financial assistance for the second
phase study of the town's coal/biomass to liquids project?
Answer. I will call you (Chuck) about this answer.
gasification technology
Question 3. Both of your projects involve gasification of waste, or
biomass or coal. That technology is well known, the Fisher Tropsch
process being around since before WWII being a part of the equation. It
is more expensive, but does allow for the more convenient
sequestration--capture--of carbon dioxide. Should the federal
government in your view be pushing to bring down the costs of carbon
capture and storage too--and what should we be doing to aid that
technology to become more cost effective?
Answer. I think it is foolish to believe we can move wholesale to
renewable energy sources away for coal, oil and natural gas. Even the
President is suggesting that 75% of our energy is going to come for
conventional sources in 2025. For the federal government to spend time
and money on renewables and not spend equal or even more on learning
how to more effectively deal with CO2 is a recipe for
failure. Yes, the government should invest more on research into carbon
capture and sequestration--finding ways to capture more of it and
proving ways to indefinitely store it. Note that even the most
``conventional'' proposals for long-term storage--pumping into depleted
oil or gas wells--has not been ``proven'' in a scientific sense and
remains as weapon available for use by those who wish to see all fossil
fuel based energy discontinued. Other potential means of storage are
but that much more theoretical. Making the research investment to
prove--or disprove--the effectiveness would be highly beneficial to all
sectors of the economy. Also, standing ready to help defray some of the
cost of carbon transmission--i.e. pipelines--might also be beneficial:
reducing industry resistance in proportion to their reduction of
prospective cost.
biomass, air quality concerns
Question 4. Alaska, of course, has a lot of biomass. As I said in
my opening statement there is 114 million acres of Interior forests
that could produce biomass. But most biomass projects involve
combustion and that opens the door to air pollutants. Fairbanks already
is under the threat of potential air quality sanctions for PM 2.5
violations in future years. How would your projects actually help
Fairbanks to meet air quality concerns in the future?
Answer. Any biomass burning in the Fairbanks area should be limited
to complete combustion, such as biomass gasifiers or other highly
efficient biomass burners. The problem in Fairbanks is that many of the
biomass burners don't even meet the current EPA standards. ``Complete
combustion'' leads to fewer particulates and industrial/commercial
scale gasification of the kind envisioned emits no air born
particulates at all. Also, because the CTL as designed could serve as a
large fluid heating source, much in the same way the Wainwright and
Eielson power plants do now, it could, through the installation of
radically expanded distributed heating system, allow for the
discontinued use of potentially thousands of PM2.5 production sources:
home heating furnaces.
______
Responses of Chris Rose to Questions From Senator Murkowski
comparison of technology
Question 1. You for years have been studying all types of renewable
energy technology looking to see what would be best and most cost
effective for use in rural Alaska communities. What do you believe is
the best technology for the future? Obviously that depends on location,
whether you are in a windy area, whether you are along a river or
coast, whether you have good biomass potential, whether you are on top
of a geothermal hotspot. But is there any general direction that you
believe the technology is headed and what is the best technology in
general as far as being economic?
Answer. Rural Alaskan communities are simply too small to ever
expect the same kind of economies of scale that larger communities
enjoy. That being said I think it is possible for most small
communities to survive the escalating price of fossil fuels by
considering the following:
1) Energy efficiency and conservation.--Most villagers will
tell you that they are already modifying their behavior to
conserve energy. People in rural Alaska use far less
electricity per capita that people in Anchorage. However, this
use could be reduced further by replacing inefficient
appliances with more efficient ones. This does not take
behavioral change, only some basic education and up-front
capital. But as you know, the bigger issue for rural Alaskans
is the cost of heating their homes, and to a lesser extent, the
price of transportation fuels. Many homes in the Bush still
need to weatherized. In my opinion, Alaska should be setting a
world standard for energy efficiency with new home
construction. Efficiency and conservation should always be
considered before, or at least simultaneously with, new
generation. It is almost always cheaper to save a unit of
energy that to produce it. I think we have all been guilty of
focusing too much on generation technologies.
2) Development of advanced hybrid systems.--Alaska is already
seen as world leader in wind-diesel hybrid technology. We
should be building on this leadership role. There are over two
billion people living in the developing world without any
electricity, almost one third of the world. That's a huge
market that Alaska could lead. We can demonstrate many
technologies and save people money at the same time, something
that can't really be done many places. As you noted, the answer
to what kind of renewable resource is used is site specific.
Alaska should keep focusing on wind because we have about 100
communities that could use it to displace diesel. The Wind
Diesel Test Center that is getting off the ground at UAF is
going to focus on how we can get more ``high penetration''
wind-diesel hybrid systems operating in Alaska. Those are
systems where over 50% of the community's electricity could
come from wind at certain times. These systems require more
advanced control systems to marry the wind turbines with the
diesel engines. Those control systems need to be optimized and
improved for better high penetrating systems. We need R & D & D
for this. The ceramic stoves that could use excess electricity
in a high penetration system are an example of one way to use
the excess electricity for heating. Charging electric vehicles
would be another way to optimize a high penetration hybrid
system. Of course, any renewable resource could be plugged into
a hybrid system. Kodiak now has a wind-diesel-hydro hybrid
system.
In terms of its possible reach, hydrokinetic power seems to be the
technology that could most benefit rural Alaska. There many Alaska
communities that are located either on a river, or on the ocean where
tidal and wave power will be possible in the future. I believe because
of its predictability, proximity to load, and sheer immensity tidal and
wave power should and will get a lot of public and private money to
commercialize it and make it cost competitive through technology
advancements and improving economies of scale. As a sister of straight
tidal technology, river hydrokinetics can benefit from advances in
tidal power. However, there are special issues on rivers like floating
debris that must be solved. Wave and tidal power are both advancing in
Europe, and in Maine and Oregon. Alaska may have already lost its
``first mover'' advantage in tidal and wave, despite the huge amount of
resource we have. However, the huge amount of resource in Alaska, along
with the need for more affordable power in rural areas, should move
hydrokinetics to the top of the list of technologies with future
promise for the State. Alaska is likely not going to be a leader in
solar PV technology because so many other Nations are already so far
ahead and will continue to lead technology advancements. However, I
believe that as more electric and plug-in electric hybrid vehicles
become available rural areas could benefit eight months a year from
solar PV power charging stations. As diesel prices go up and PV prices
go down, the addition of solar PV to other hybrid systems will make
economic sense. Solar thermal already pencils out to heat water and
potentially whole buildings in places where fuel oil prices are high.
Small hydro and geothermal are very site specific and will be viable if
located near enough to a load. Biomass for central heating is another
promising technology. Several Alaskan communities are currently putting
in systems and many more are located near sustainable sources of woody
biomass and/or wood residues.
technologies for the future
Question 2. Everyone right now is focused on wind, solar,
geothermal, biomass, and do a degree ocean renewable. We in Alaska know
that hydroelectric is a wonderful source of power from an environmental
standpoint, but problems in the past in the Lower 48 have certainly
caused barriers to be erected against federal aid for hydroelectric.
Are there new technologies out there that should be pushed, whether
generating fuel from algae--pond scum--or using renewable energy to
produce hydrogen from water--hydrogen being a fuel that can be shipped
when high voltage transmission is expensive and difficult to site.
Where should we be focusing our attention to maximize energy production
for Federal aid dollars? Should hydro be more in that mix?
Answer. Large hydro should and probably will be in the mix for the
Railbelt's future. My bet would be that Chackachamna's economics come
out looking better than Susitna's. Large hydro will help the Railbelt
diversify its energy portfolio and retire old and inefficient gas
turbines. If we do build so much large hydro that we have excess
electricity on the Railbelt, I think it would be prudent to apply that
energy to electric transportation and heat for the citizens of the
State who will no doubt be subsidizing the initial capital outlay that
will be required to build large hydro. It certainly would be nice to
allow new, ``properly permitted'' hydro projects in Alaska to trade
RECs under any new cap and trade scheme that might become law. As far
as new technologies go, without a massive effort to change our
infrastructure to accommodate the storage and transportation of
hydrogen, I do not see that as a near term way to store excess or
stranded renewable energy resources. I am, however, intrigued with the
notion of making anhydrous ammonia from large stranded renewable energy
resources, especially those located near ports in the Aleutians. Agrium
was using the hydrogen in natural gas to make ammonia-based fertilizer
for years. Anhydrous ammonia, or fertilizer, are two products that can
be readily shipped and monetized using existing infrastructure. I think
it is worth looking into tapping into our large stranded renewable
energy resources with electrolysis and ammonia production in mind. Bill
Leighty from Juneau is a leading authority on using Alaska's stranded
renewables for hydrogen and/or ammonia production.
Advancements in battery technology will help firm all variable
renewable energy resources. Compared to other technology advancements
over the last 50 years, advances in batteries are relatively meager.
Again, because of our unique isolated grid communities, Alaska has a
special incentive to lead in batteries and other energy storage
technologies. Finally, I would put in another plug for developing
highly energy efficient homes. It will save Alaskans billions of
dollars over the long term and it may also help spur an industry and
knowledge base that can help us diversify our economy, something we
desperately need to do.
______
Responses of Steve Haagenson to Questions From Senator Murkowski
Question 1. As a State official responsible for power plannmu, what
would be the recommendations you would give the federal government for
what it should be doing to assist in energy development? Obviously
everyone wants more money; but with a federal deficit of more than $1
trillion this year and a forecast deficit of $1.3 trillion for FY 10,
finding that money is difficult. What should we be doing to better
utilize our existing funding for energy development? How can we be
smarter in promoting energy production and usage?
Answer. Recognizing that funding has become difficult at both the
State and Federal levels, we need to focus our efforts on smart
thinking to better utilize existing funding or remove roadblocks for
energy development. When money is tight, the development of a triage
method will focus funds to reduce risk and fill knowledge gaps with
applied research. The triage tools should focus on risk reduction to
reduce the failures before large scale deployment of a technology.
There are many technologies and resources available for energy
development. As a general rule, pure research provides valuable
information on emerging technologies but may be years away from a
mature application. Applied technology provides expanded knowledge that
will move the application toward commercial operation. The National
Renewable Energy Lab and Denali Commission are two great examples of
federal groups that are focused or moving emerging technologies toward
commercialapplication. University of Alaska Fairbanks, Alaska Center
for Energy and Power is also heavily involved in applied research to
fill knowledge gas on resource sustainabity and emerging technology.
The Cold Climate Housing Research Center (CHRC) has recently
constructed a low-cost,low-energy efficient home in AnaktuvuhPass. A
slide show of the construction of the Sustainable Northern Shelter
project in Anatktuvuk can be seen at www.cchrc.org. It is smart
business to build low-enegy homes to reduce the energy consumption as
we develop technologies that use local resources to construct and power
our communities.
The following is a list of technologies, resources and
demonstration projects which could be developed to enhance the
sustainability of Alaskan communities:
Sustainable Northern Shelter programs;
Gasification Technologies for biomass: direct-fired or
plasma;
Assessment of wind resources with on-site anemometers;
Assessment of willow resources to determine growth rates;
Assess the resource potential for wave and tidal power;
Develop technologies for capturing wave and tidal resources;
Control technology to provide integrated system operations;
Optimize delivery systems to reduce the costs and increase
reliability;
Evaluation of energy conversion technology and storage
efficiencies;
Capital cost estimates based on required sizing for
technoiogies;
Opportunities to reduce construction and operating costs;
Identify opportunities for in-State component construction
and assembly;
Identify opportunities for in-State operations and
maintenance personnel training;
Development of model communities to demonstrate
technolcoies;
Domestic use, transportation and storage of hydrogen;
Domestic use, transportation and storage of ammonia;
Cellulosic Ethanol production from biomass;
Access to low interest loans and loan guarantees.
There are federal programs for energy development under US
Department of Agriculture, Housing and Urban Development and Bureau of
Indian Affairs which range from loan guarantees to loans to grants.
Economic development programs are key to a sustainable community. An
economic base would provide jobs that would in turn provide income to
allow for payment of bills and expenses. There are many economically
depressed areas in Alaska that could benefit from a hand up as they
develop long-term careers in their communities.
With the significant federal in holdings in Alaska, harvesting and
accessing local resources will likely involve federal review,
permitting and approval. A comprehensive review to streamline the
permit process could provide easier access to available resources and
benefit communities across Alaska.
Question 2. Producing renewable energy is useful, what would be
even better technology to store the energy made when the wind is
blowing, the sun shining and water flowing. In your testimony you spoke
about trying to store renewable electricity by heating water and then
using that hot water for either space heat or to generate electricity
using potential low-temperature turbine technology. Can you amplify on
what you are seeking from the State's consultant and how such a system
might work in a typical village? What other technologies are you seeing
that most interest you for reducing overall energy costs either through
promoting energy efficiency, or storing energy or converting it into
transportable fuels? There is talk about hydrogen fuels or about using
wind to produce ammonia, which is somewhat easier to transport than
hydrogen. I know you looked at biomass/waste generation while at GVEA.
What looks like the most cost-effective, best alternatives from your
viewpoint at this time?
Answer. Alaska has resources which may not be available when they
are needed. To solve this situation AEA is looking at storage mediums
which can store energy for one day, one month and one year. Tidal
power, although very predictable, is not continuous and may use a one
day storage medium. Solar is very plentiful in the summer but will
require up to 12 months storage for use in the winter months.
Tidal power could use a short-term storage medum such as batteries,
compressed air air, or pump storage which could hold excess power anti
needed to provide power at slack tide, it is en electrical system
requirement to provide continuous power. Alternatively, if a barge was
constructed to house hydrokinetic devices, the energy could be used to
power a compressor to make ice when the tide is flowing and stop when
the tide is slack. The availability to obtain ice closer to the fishing
grounds could save significant fuel for both production and
transportation of ice rather than picking up ice at a distant port.
Wind power would use a mid-term thermal storage medium such as hot
water, thermal-oil or other material. Wind can provide electricity and
heat when the wind is blowing. The key is to store energy when the wind
blows so it can be used at a time when the wind stops. For years, water
has been used for energy storage and transfer in geothermal
applications. There may be in any storage mediums but for this
discussion we will use water. A large wind farm could provide
electrical energy directly to the distribution system with the excess
electrical wind energy being input and stored in the water tank. When
the wind stops, the hot water would provide heat to a community and
could be used to make electricity through a binary phase turbine,
similar to the Chena Chiller Organic Rankine Cycle (ORC) generator used
at Chena Hot Springs. Alternatively, the diesel generators could be
operated at an increased efficiency to make electricity with the water
jacket heat being stored in the water tank. Stored energy could be
augmented through other renewable resources such as solar, hydrokinetic
or tidal, or other fuel resources such as diesel or wood.
Solar power is very predictable but will require long-term storage
such as a super insulated thermal mass. CCHRC is looking at use of a
large insulated thermal mass that would be heated in the summer time
with abundant solar energy, and used as a thermal source for a heat
pump to heat buildings in the winter. There may also be opportunities
to use a heat pump to store the heat in the thermal mass in the summer
time and extract it when needed in the winter months.
The attached PowerPoint* shows a map of Alaskan communities with
local resources identified.
---------------------------------------------------------------------------
* Document has been retained in committee files.
NUMBERS indicates Wind Class (7 being
best)
W indicates Wood and Biomass
H indicates Hydroelectric
GAS indicates Natural Gas
COAL indicates Coal
T indicates Tidal
GEO indicates Geothermal
As you look at the map you will see areas where there is only one
resource. The best alternative is the one that uses the locally
available fuel, so in southwest Alaska we are looking at mainly wind
with our artificial geothermal, hot water energy storage system (page
23 of the PowerPoint). In the upper Yukon, we are looking at main wood
and biomass Ccra wo has traditionally been used to provide heat in
areas where it is available. Sustainability may become an issue as more
people use cord wood. Biomass from fast growing plants may provide a
better energy source as they require less acreage to provide a
sustainable resource. The sustainable harvest level of both cord wood
and fast growing biomass will need to be determined, as well as the
access to rty where the resource resides. Appropriate conversion
technologies will need to be identified for each resource to make both
heat and electricity.
Hydrogen is considered a clean, non-carbon based fuel, but only if
it is made from a renewable energy source. Similar to electricity,
hydrogen can be considered an energy medium rather than a source of
energy. Being the smallest atom know to man, hydrogen presents its own
storage and transportation chalIenges. With some applied research into
the utilization, hydrcoen could become a vital fuel which could be
generated from Alaska's vast tidal and wave power resources.
Ammonia is another non-carbon based fuel which could be generated
in Alaska using remote resources that would be uneconomic for domestic
uses due to the high delivery costs to the point of use. This is
another emerging technology in which Alaska could be the leader eid
supplier of ammonia to a global market.
Thank you again for the opportunity to testify. Let me know if
there is any way can help advance local production of energy in Alaska.