Navigating Energy Solutions for Alaska’s Railbelt

The ACEP study compares the energy costs of four scenarios to a 'business as usual' (BAU) case that relies primarily on natural gas imports (Figure 1):

1. A wind, solar, and hydroelectric ("W/S/Hydro") case that includes building the 500MW to 600MW Susitna-Watana hydroelectric project.
2. A wind, solar, and tidal case that includes 400 MW of tidal energy capacity in Cook Inlet.
3. A wind, solar, and nuclear case that includes building about 500 MW of nuclear capacity on the railbelt.
4. A wind and solar only scenario, where the size of the wind and solar are determined

What I find most striking about these results is that the cost of energy in all of the scenarios-which involve major differences in generation infrastructure and system operations-are all within 12% of the business-as-usual case. Also note that the size of the fuel cost bars (blue) in this figure provide an approximate indication of relative carbon emissions for each scenario. It is also important to recognize that none of these scenarios eliminates the need to import natural gas in the short-term because: 1) they cannot be built quickly enough to fill the gap in gas supply, and 2) they do not include replacing the heat currently provided by gas.

In the business as usual case (Figure 1, "BAU," far left), energy costs are dominated (~70%) by fuel costs. The wind, solar, and hydro ("W/S/Hydro") scenario reduces carbon emissions by nearly 90%, but it is also projected to be the highest-cost scenario. However, we should be careful not to interpret the scenarios that include tidal and nuclear as actually being lower-cost because-as the authors are careful to point out-these scenarios use cost targets, rather than real-world cost data. This is because these technologies are in pre-commercial demonstration phases, and actual costs are poorly defined. Therefore, the uncertainty in the costs of these scenarios is much larger than the others. Furthermore, because these technologies are pre-commercial, the timeline for deploying them at this scale has much more uncertainty than the other scenarios.

This leaves the 'wind and solar only' scenario, which was investigated as part of an addendum to the original report. While the carbon emission reductions are not as large as the hydro and nuclear scenarios, this scenario does reduce carbon emissions by more than 60%. When this is combined with existing renewable energy sources, the total fraction of electricity generation from carbon emissions free sources is 77%. Notably, this is the same clean-energy fraction that NREL identifies in their least-cost scenario that also relies primarily on new wind and solar installations.

ACEP's study estimates that the cost of this scenario is between 4% less expensive and 6% more expensive than the business as usual case, and they attribute this uncertainty to macro-economic factors such as fuel costs, interest rates, and renewable capital costs. For example, if imported natural gas is 20% more expensive than they estimate, then the wind and solar case saves 4%. On the other hand, if renewables are 20% more expensive than they project, or if interest rates are higher, then the wind and solar case is 6% more expensive than business as usual.