By Tim Bradner
Alaska Journal of Commerce

Fuel prices in Alaska are headed through the roof. The state is ramping up alternative energy projects quickly in response.

It can't help much this year or even next - state leaders have a different idea for short-term relief - but in the long run a combination of wind power, hydro, biomass and geothermal could get many Alaska communities at least partly off their heavy reliance on fossil fuels.

All the projects so far are aimed at offsetting fossil fuels used for power generation. They won't reduce the cost of transportation fuels, but in time they could make those monthly utility bills a little less painful.

Last spring the Legislature passed House Bill 152 and Gov. Sarah Palin signed the bill into law May 22. The legislation creates a five-year, $250 million renewable energy program that puts Alaska in the forefront among states putting money into renewable energy projects.

In a separate action, legislators and the governor approved $25 million to fund submarine cables that would connect a 50-megawatt wind power project on Fire Island, in Cook Inlet just off the shore of Anchorage's international airport.

The state grant is a big boost for the project, which is being privately developed by a joint venture of major U.S. wind power company enXco and Cook Inlet Region Inc., which is the local Alaska Native regional corporation and the landowner at Fire Island.

EnXco and CIRI say the Fire Island project can be doubled to 100 megawatts, and it would also provide a foundation for other wind projects the joint venture is considering in the state's Railbelt area, all of which could feed power into the regional power grid.

“We see Fire Island as the anchor to a number of other renewable projects because having it in place will reduce costs for other projects,” said CIRI spokesman Jim Jager.

Chugach Electric Association and Municipal Light and Power say they welcome having power generated by wind because it will enable them to cut back on using natural gas from gas fields in the region that are being depleted.

For other parts of the state, however, the money made available under House Bill 152 will jump-start a wide variety of projects. The Alaska Energy Authority has a list of 19 projects ready for construction with a price tag of $103.7 million. The state would fund about half of this with the rest provided by matching funds from the project owners or the federal government, according to Peter Crimp, the renewable energy program manager at the Alaska Energy Authority.

There is a longer list of 41 projects still in the conceptual and development stage that total $1.194 billion. For these the state could put up money for more planning and feasibility work, Crimp said.

The new legislation does make $50 million available this year, however, and that's a tenfold jump in money that was previously available for renewable projects. The only money that was available was $5 million in federal funds provided through the Denali Commission, although the state has put money into specific projects from time to time.

The new program puts Alaska at No. 2, behind California, among 16 states and the District of Columbia that put money for renewable energy, said Chris Rose, executive director of the Renewable Energy Alaska Project, an advocacy group.

Most of the other states don't actually use state money but fund renewable projects with money raised from utility ratepayers through surcharges, Rose said.

Despite the sparse funding so far in Alaska, the state has carved itself a niche in some areas. With a combination of federal and utility funds, a number of hybrid wind-diesel projects now exist in small rural communities and more are under construction.

With this experience, Alaska is considered a technology leader in the efficient combination of small wind and diesel generation systems, Rose said. Because wind doesn't blow all the time it must always be considered a backup to diesel.

Until a way is found to store electricity generated by wind, which will come someday, diesel must be kept as the main power source.

Given this, the challenge has been in the control systems that crank back the diesel generation when the wind picks up, and then throttle up the diesel generators if the wind dies, Rose said.

“We've become quite advanced in this because we're one state with seven villages with operating wind systems that share information,” Rose said.

Alaska is in a unique position on this because most places with wind generation projects have large systems that generate a lot of power that feed into a regional power grid also supplied by other power sources like coal, nuclear or hydro plants. With these projects there is less of a problem integrating variable wind power.

However, a small rural Alaska village must have a reliable power supply and that is most often diesel, hopefully supplemented by wind, small hydro or other sources.

Rose thinks the experience being gained with small wind-diesel projects along with the remote monitoring and management of small rural power plants through the Internet will create opportunities for Alaska firms doing work on the projects. Many developing nations have rural areas with little infrastructure that is similar to Alaska's, Rose said. There are small projects in outlying parts of Australia that are similar to Alaska's, but in few other places.

The need is immense. “There are two billion people without electricity,” Rose said. “That is two thirds of the world's population.”

Tim Bradner can be reached at tim.bradner@alaskajournal.com">tim.bradner@alaskajournal.com.