Econ 919 — State big fan of planned wind and landfill projects
Money from grants won’t necessarily make or break an energy project.
But it can certainly help.
“It makes them more attractive to the board. It makes them more attractive financially," said David Thomas, director of strategic services for Homer Electric Association. One of his jobs is helping the cooperative transition toward more renewable power sources.
He spent a chunk of his winter break last year filling out grant applications for the Renewable Energy Fund, a state program geared toward lowering the costs of development for rate-reducing renewable energy projects in rural Alaska. This year, the program could hand out more money than it has since 2014 — about $15 million for 27 projects.
Thomas’s grant application efforts paid off. All five projects submitted by HEA submitted were recommended for funding by the Alaska Energy Authority, which oversees the fund.
That means as long as there’s money in the state budget for the fund, HEA should get the money it asked for — including more than $800,000 for a methane capture project at the Soldotna landfill.
“If it’s $880,000 off the total project to achieve final design, that’s 8 percent of the project, the payback on the project probably happens a year sooner … it just makes it look better economically," Thomas said.
The money would help HEA and the Kenai Peninsula Borough design a converter at the Central Peninsula Landfill that would take harmful methane from the landfill and — instead of losing it to the air — capture it and burn it for HEA’s grid.
Some of that power would go toward evaporating leachate (garbage juice) at the landfill itself.
Proponents of the project say it would amount to big cost savings for the borough. At a conversation hosted by Cook Inletkeeper this week, Mike Salzetti with HEA said he was excited about the Renewable Energy Fund opportunity.
“I’m really optimistic that if we have a shovel-ready project, that there's further grant funding out there for a project like this. It really is one of those win-win-win type projects," he said.
The other projects in HEA’s docket are four wind projects, at different sites — Nikiski, Ninilchik, Summit Lake and the Caribou Hills.
The idea is that one of those sites could be a good fit for a nine-turbine, 30 megawatt wind energy project down the road.
And the cooperative wants to test all four before it commits to just one. It will put meteorological towers at each spot to get 365 days worth of data to determine whether a site is up for the task or not.
Getting that data is an important first step before embarking on a project, said HEA board member Erin McKittrick.
“And you can get a pretty good idea from computer modeling," she said. "But computer modeling isn’t perfect, especially in complicated, mountainous places like Alaska.”
Every site has different pros and cons. Those factors, in turn, can impact the economics of a project.
“So for instance, you look at Summit Lake — that’s a spot that’s up on a ridge, it’s very windy, so logistically difficult to get to," McKittrick said. "So more power but higher costs. And some of the other sides are less windy but logistically easier.”
The idea, she said, is HEA will do the first steps all in parallel. Feasibility studies take a while, since each site needs a year of data. So McKittrick says it’s important to get them all running at once.
HEA is asking for about $200,000 in funding per location.
The Alaska Energy Authority also recommended the state fund a feasibility study for the Dixon Diversion project — a plan to increase the capacity of the corporation’s own Bradley Lake hydropower project, across Kachemak Bay, using water from a retreating glacier. The grant would put $1,000,000, plus a $1,000,000 match, toward a feasibility study for the expansion.
Previous rounds of the Renewable Energy Fund have helped pay for similar studies at Mt. Spurr, for geothermal energy, and another wind project in Nikiski. There have been several wind feasibility studies on the Kenai Peninsula in years past, but that data is no longer current and none of those projects came to fruition.
Some permitting costs for Grant Lake were also spotted by the program. That’s the ongoing plan to put a hydroelectric project in Moose Pass.
It’s a lot of projects to keep straight. Utilities like HEA are juggling many early-stage renewables programs at a time with the hopes of building their renewables portfolios to complement existing, more expensive fuel sources, like natural gas. That’s how HEA gets almost 90 percent of its energy today.
Alaska Energy Authority Executive Director Curtis Thayer said his agency was able to recommend more projects than usual this year. It passed through 27 of the 39 applications it received.
“When the state was very flush with dollars, then we had robust programs, a robust REF,” Thayer said. “But if the state did not have money, then we didn’t have the funding levels. And several years, we didn’t even go out for solicitation.”
He said funding projects in their early stages — including feasibility studies — should give grantees some security to take the next leap and get funding for other stages of those projects.
Another benefit of the grants, Thomas said, is that publicly funded projects are available to the public. So cooperatives don't have to reinvent the wheel with each new project design or feasibility study.
“So there's a wider benefit beyond the peninsula, or Homer Electric,” he said “Because the data’s public for whoever wants to use it.”
If the fund is approved in the state’s final budget, all 27 programs — including HEA’s — will be funded.
Governor Mike Dunleavy and the Alaska House included the $15 million fund in their budgets. Now, it’s up to the state Senate.
KDLL Intern Tanner Inman contributed reporting.