Wind-Diesel Systems in Alaska: A Preliminary Analysis

Abstract

Most remote rural communities in Alaska use diesel to generate electricity. But the recent rapid development of a worldwide commercial wind industry, along with the rise in diesel fuel prices, has increased interest in wind power in rural Alaska—both to reduce energy costs and to provide local, renewable, sustainable energy. Wind is abundant in Alaska, and a growing number of rural communities are building winddiesel systems, integrating wind into isolated diesel power plants. These systems have moved from the initial demonstration phase a decade ago toward a technology available for many communities. Even in places that have not yet added wind, some rural utilities are planning for the possibility. For example, Alaska Village Electric Cooperative (AVEC) has committed to making new diesel power plants “wind ready” by designing its electrical systems so that wind turbines can be incorporated in the future without major reconfiguration. But it is not clear under what rural Alaska conditions wind-diesel systems are more economical than conventional diesel plant operations. The Alaska Energy Authority asked the Institute of Social and Economic Research (ISER) and the Alaska Center for Energy and Power (ACEP) to assess the performance of existing rural wind-diesel systems. We analyzed data available for existing wind-diesel systems as of spring 2010. Keep in mind that our analysis is preliminary; most rural wind-diesel systems are very new, and more time is needed to evaluate them fairly. Only three wind systems (Kotzebue, Wales, and Saint Paul Island) have been operating for more than a few years. Initial funding for the Kotzebue and Wales projects came from the U.S. Department of Energy, which funds research but does not subsidize utility operations. These early projects, built in the late 1990s, faced problems but demonstrated there is hardware that can operate in arctic environments. The Saint Paul village corporation funded the system on the island; it provides power for an industrial complex and airport the corporation owns. It is a high-performing system, and the most successful of the early demonstration systems, as measured by its capacity factor. However, it should be noted that both the Kotzebue and Wales systems have provided valuable experiences and lessons learned while integrating wind on a community-scale grid. Beginning in 2004, the Denali Commission funded projects in five communities (Selawik, Hooper Bay, Kasigluk, Savoonga, and Toksook Bay). In 2008, the Alaska Legislature created the Renewable Energy Fund, a competitive program intended to invest in renewable energy. That fund, which is administered by the Alaska Energy Authority, paid for construction of six projects listed as completed in spring 2010.