Alaska's rural energy microgrids offer a prototype for powering the world

WASHINGTON -- Alaska's most remote villages may have a thing or two to teach the rest of the United States about keeping the lights on.

State agencies, private companies and the federal government are increasingly looking to the remote electrical "microgrids" that power rural Alaska in places where roads and long-distance electric transmission lines don't go.

Energy experts and advocates in the state are hoping that what they've learned about producing power in a difficult climate could be useful -- and profitable -- to share, helping get the world's remote islands and parts of sub-Saharan Africa powered. But not just remote places: Violent storms, terrorist attacks and an increasing awareness of the vulnerability of the electrical grid are causing many to doubt the wisdom of relying solely on a utility-centric model for power distribution.

That's where Alaska comes in: If you can make it work here, it can work anywhere.

In the last decade, the state and the federal governments have invested nearly a billion dollars in microgrid technology in Alaska, from projects aimed at bringing down the cost of electricity in remote areas to adding renewable power sources that lessen dependence on diesel generators.

A microgrid is a localized power grid. Some are connected to larger traditional power grids, and can disconnect to operate autonomously, though not all have that capability. Others, like most of the microgrids in Alaska, are like islands — they operate on their own, with no connection to a larger transmission system like the one that connects the Railbelt.

Under the Obama administration, there have been efforts to train village leaders on everything from running wind-power systems to making buildings more energy-efficient. The federal government is also using its chairmanship of the Arctic Council -- through 2017 -- to amplify U.S. leadership on cold-weather microgrids.


Alaska's early efforts provide "a pretty big market advantage in a lot of ways. There are things that other places in the country can learn from these experiences," Gwen Holdmann, director of the Alaska Center for Energy and Power, said at a January conference in Washington, D.C.

"Every public utility commission (in the country) is looking at this issue," said Michael Winka, senior policy adviser with the New Jersey Board of Public Utilities, at a recent conference in the nation's capital. Getting to a point where 30 percent of a grid's power comes from renewable resources is appealing, he said.

"The folks on our side would love to be talking to Alaska about how you do that," he said. "You guys are blazing a trail for folks, and it's already a learned experience, instead of us trying to learn it."

"I wouldn't discount" the fact that the innovation is happening in "these little rural communities," Winka said. Thirty percent renewable power "is huge." California, known as the solar capital of the world, is "not even close to that," he said.

Alaska has more than 200 microgrid projects, many of which are enabled by a different cost-benefit equation than might exist elsewhere in the United States, where the incentive to try new technologies is tempered by lower energy prices, according to Cady Lister, lead economist at the Alaska Energy Authority, who was in Washington last week to share the state's experiences at a national energy conference.

When President Barack Obama last summer visited Alaska, including a stop in the Arctic, he announced a slew of federal initiatives focused on microgrids. As part of that, the Energy Department launched a $4 million competition in December to help remote Alaska communities develop sustainable energy plans.

On Monday, the Energy Department announced it would make another $7 million available for technical assistance and training in energy programs for Alaska Native communities and American Indian tribes.

And in January the Energy Department launched a $220 million grid modernization effort, funding 88 projects across the United States -- starting with Alaska. A $1 million research and development project in Alaska will focus on increasing the reliability of remote energy systems while decreasing diesel use by 50 percent in the state's microgrids.

Energy Secretary Ernest Moniz said the new funding initiative -- combining funding and expertise from the federal government, industry players, states and academia -- "will help us … improve our electrical infrastructure so that it is prepared to respond to the nation's energy needs for decades to come."

Moniz was scheduled to be in Bethel on Monday for a Senate field hearing on microgrids hosted by Alaska Sen. Lisa Murkowski. Murkowski has been backing an energy bill that would include more federal funding for microgrid technologies. Passage has been delayed by congressional fighting over funds for the lead crisis in the drinking water system in Flint, Michigan.

In the past year, the federal government contributed $250,000 to the Alaska Emerging Technology Fund and a $500,000 matching grant to the University of Alaska to establish the Alaska Center for Microgrid Technologies Commercialization, aimed at advancing small business development of microgrids. In September, the Energy Department doled out $1.2 million to TDX Power Inc., in Anchorage, to design a microgrid control system on St. Paul Island in the Bering Sea. And there are many more million-dollar-plus efforts, including grants from the Agriculture Department to help cover high-cost electricity and through the Denali Commission to upgrade power systems.

Meanwhile, the Alaska Legislature has set a goal of getting half of Alaska's power from renewable sources by 2025, with a 15 percent improvement in energy efficiency. The state's Emerging Energy Technology Fund established a $250 million low-interest revolving loan fund to make efficiency improvements at a quarter of the state's largest public buildings by 2020. Since 2008, the state has appropriated more than $360 million for improving energy efficiency and more than $150 million on a renewable energy grant fund.

Because power is already so expensive in remote areas of Alaska, the costs of installing novel systems isn't higher than sticking with business as usual. That "does create a lot of incentive for integrating renewable resources to displace that imported diesel fuel," said Holdmann of the Alaska Center for Energy and Power.

Why the world needs what Alaska knows

In the Lower 48, a different kind of incentive for microgrids has emerged. Reports have shown that a few small, well-targeted attacks on the U.S. power transmission system could cause a coast-to-coast blackout. And after eight million homes in 17 states lost power during Hurricane Sandy in 2012 -- some for weeks -- many states are looking to install microgrids.

New Jersey has 41 microgrids, but they aren't all able to disengage from the larger transmission grid in times of emergency, Winka said. During Hurricane Sandy, only six of those New Jersey microgrids were able to continue operating. The most notable was the one at Princeton University, where the power stayed on while the grid was down for weeks. The university installed the system to save about $2 million a year on energy costs but saved "hundreds of millions of dollars" in research that would have been ruined had the campus lost power during the storm, Winka said.

Interest in and opportunities for microgrids are worldwide.

A report by Navigant Research found a potential $5.8 billion global microgrid industry by 2023, with a potential $300 million share for Alaska. So far, the more than 800-megawatt capacity of Alaska's "islanded" microgrids -- meaning they are not connected to larger electrical grids -- is the largest in the world, according to Navigant.


"That's a pretty big market advantage in a lot of ways. There are things that other places in the country can learn from these experiences," Holdmann said.

"In the Arctic, we saw the very first sunglasses. The Arctic brought us kayaks and snowshoes," said Holdmann, pointing to the region as "a place really ripe with innovation and creativity," ideal for leading the way in 21st-century energy systems.

The efficiency and feasibility of Alaska's energy systems run the gamut.

"About half of the communities in Alaska are now incorporating grid-scale levels of renewables with their diesel-based power generation," Holdmann said.

Murkowski's field hearing Monday in Bethel -- to which she's bringing senators from Wyoming, Washington, West Virginia, Montana and Maine -- isn't the only upcoming opportunity for Alaska to show off its islanded energy systems.

Holdmann is part of a project at the University of Alaska Fairbanks that's looking for ways to take advantage of that global opportunity. The Global Applications Program is focused on exporting knowledge and learning experiences, especially to the developing world, from Alaska's tribes and more than 100 private companies.

The program is launching a multiphase pilot program this year, with support from other Arctic nations, to educate others on microgrids. A series of online seminars will begin in April, with a two-week fellowship program in Fairbanks to follow in July.

In addition to its involvement in the pilot program, the State Department is working on building an "Arctic Renewable Energy Atlas" to help communities across the Arctic identify opportunities for renewable energy, said Sydney Kaufman, a foreign affairs officer for Arctic Energy Security with the State Department.


"We also want to find ways to share technical, financial and policy best practices" with other rural areas around the Arctic, Kaufman said.

Meanwhile, the state is planning to solicit bids in the next few months from companies that may be able to help add renewable power to remote grids that rely heavily on diesel generators, said Lister of the Alaska Energy Authority. "Part of what we're looking for is something that's simple," he said.

Despite the many opportunities for Alaska to surge ahead on the world stage, challenges remain for making remote Arctic power reliable and affordable.

Transport is costly, and diesel fuel requires reliance on out-of-state deliveries. Solar power has limits during dark northern winters. Battery storage of power -- still nascent anyway -- has its own complications, from handling to disposal. And wind turbines have delivery and logistical challenges. All this is amplified by training needs: Can someone on your block run an advanced electrical grid? Fix a wind turbine?

For now, "diesel is the backbone of all of our remote power systems," accounting for 90 percent of rural communities' electricity, Lister said.

The state has incentive to continue trying because of "crippling costs" in many rural communities, where power is roughly $1 per kilowatt hour -- many times the national average, Lister said. The state sends tens of millions of dollars to communities every year to defer the costs of electricity for ratepayers -- many of whom live a subsistence lifestyle and use as much as 50 percent of their yearly earnings on the power bill.

To that end, Kaufman said, the Obama administration sees clean energy in the Arctic as "very much an economic development question."

Erica Martinson

Erica Martinson is Alaska Dispatch News' Washington, DC reporter, and she covers the legislation, regulation and litigation that impact the Last Frontier.  Erica came to ADN after years as a reporter covering energy at POLITICO. Before that, she covered environmental policy at a DC trade publication and worked at several New York dailies.