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Renewable energy makes financial sense for Alaska

  • Author: Elan Edgerly
    | Opinion
  • Updated: January 31, 2017
  • Published January 30, 2017

Wind turbines stand in the clouds on Pillar Mountain in Kodiak in 2012. (James Brooks photo)

The mitigation of climate change is indeed a powerful argument for a shift away from carbon-producing technologies and toward renewable energy. The effects of climate change are being felt in Alaska, as evidenced by the inundation of villages such as Shishmaref and Kivalina at the hands of lessened sea ice, more powerful storms and rising sea levels. This isn't an arbitrary threat but one with a huge literal price tag — the cost to relocate Kivalina is expected to be $100 million, or about $250,000 per resident.

Although happening at an unprecedented rate, the effects are slow on a human time scale. Hence, it is understandably difficult to motivate policy change based solely on mitigating climate change. Fortunately, there is another compelling argument for turning increasingly to renewable energy. Renewable energy will be cheaper than traditional energy-producing methods, and in several instances in our state, it already is.

This is especially true in rural Alaska, where energy prices of over 60 cents per kilowatt hour are more often the rule than the exception. Electricity costs are high in rural communities because they usually generate with diesel fuel, which often costs upward of $7 a gallon. Indeed, several villages are taking notice of this and installing renewable energy to offset the cost of diesel generation.

A prime example is the city of Kodiak, which generates nearly all its electricity from either hydro or wind. According to the Kodiak Electric Association's website, the cost of wind generation is 11 cents per kWH, and hydro is 6.8 cents per kWH. Compare that to their cost of generation using diesel (28.9 cents per kWH) and the trend becomes clear. Kodiak customers only pay 13.8 cents per kWH, less than several railbelt markets, including Anchorage, Mat-Su and Fairbanks. So the average consumer in Kodiak will pay $20 less per month than someone using the same amount of electricity in Anchorage; this is remarkable for a remote island community.

Likewise, consider the case of Kotzebue. Kotzebue Electric Association generates up to 20 percent of its electricity using a 2.94 MW wind farm four miles south of the town. According to electric association general manager Brad Reeve, the city has saved 200,000 to 250,000 gallons of diesel per year (about $1 million to $1.25 million). The reduced diesel consumption has led to a Cost of Power Adjustment reduction of 10 cents per kWH, translating to a savings of over $60 per month for the average Kotzebue consumer.

A similar pattern emerges at other rural sites using wind energy. The Alaska Village Electrical Cooperative, a nonprofit co-op serving villages throughout Western and southern Alaska, has saved almost $8 million in fuel costs since 2006 because of renewable energy installation.

Renewable energy resources are not limited to wind and traditional hydro. For example, the Northwest Arctic Borough installed solar arrays at water plants in 11 villages, resulting in savings of over $80,000 since March 2013. Despite the dark winters, Alaska actually has an average annual solar input comparable to Germany, which is among the world leaders in solar energy installations.

Enormous resources also exist in our rivers and oceans. A study by Georgia Tech Research Corp. showed that Alaska has approximately 438 terawatt hours a year of tidal energy potential. (A terawatt is 1 trillion watts, or about 16.7 billion 60-watt bulbs. One TWh is the amount of power it would take to illuminate these bulbs for an hour.) That's roughly 94 percent of all the tidal energy potential in the United States.

Another study by the Energy Power Research Institute found that Alaska has approximately 20.5 TWh per year of recoverable river energy.  For scale, the Energy Information Administration lists Alaska's total electricity usage in 2014 at 5.47 TWh.

Due to mass production and improved technology, renewable energy sources are increasingly cost-comparable to natural gas and oil. Simply put, the more a technology is used, the cheaper it gets. For example, since 2000, solar's global energy share has doubled seven times and wind's global energy share has doubled four times. For each doubling of solar or wind, there is an accompanying cost reduction of 24 percent or 19 percent, respectively.

This illustrates the beauty of renewable energy. It is technology-based (as opposed to fuel-based) energy and technology predictably becomes cheaper. The same cannot be said of a volatile market like oil and gas. The point is that, as renewables become cheaper, generating electricity with renewables will become cheaper than conventional methods, even in non-rural areas. This is already the case in some states.

All this considered, we have a unique opportunity at our doorstep. Alaska is the world leader in microgrids (smaller-scale, unconnected islands of power demand typical of rural villages), with over 200 throughout the state. Of these, 70 have some form of renewable energy installed, leaving the majority with few or no renewables. Some of these areas have diesel prices up to $10 a gallon, translating to astronomical electricity costs. Further, we have an enormous resource on which to capitalize. Thus, not only is it now possible to help offset some of the effects of climate change that are disproportionately felt by Alaskans, but it is now possible to do it in a fiscally beneficial way.

Alaskans stand to experience climate change at a faster rate than anywhere else in the United States, and we pay the second highest average energy costs in the nation; this is truly an issue that stands to affect every resident. Unfortunately we seem to be at risk of losing momentum on this issue, demonstrated by reduced funding for the Alaska Energy Authority, the Renewable Energy Fund and the Emerging Energy Technology Fund. The technology exists; the catalyst needs to be local energy policy. So, with the Legislature now in session, it is time to vocally support renewable energy development in Alaska and to call upon our representatives to do the same.

Elan Edgerly is an engineer. He was born in Kodiak and now lives in Anchorage, where, when he isn't working, he plays in the outdoors and plays music with friends.

The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com

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