Embracing the Future: The Energy Transition in Alaska

This year’s Sustainable Energy Conference in Anchorage left me grumbling at the drumbeat of support for building a natural gas pipeline, vilifying “intermittent” clean energy alternatives, and harping on the narrative that restrictive federal permitting is the root of our Alaskan stagnation.

I hadn’t planned to attend the conference. I’m glad I did see so many friends, but I wish I didn’t leave with a concern that our leaders are stuck in an old narrative of our world. Their view of sustainable energy focuses on “sustaining” oil and gas! Alternatively I propose that our future is dependent on the economic value of how we generate and use energy, rather than how we extract it and export it.

To be clear, I’m not opposed to a gas line, but it has cost us $1 Billion in scarce public funds and opportunity costs of alternative energy and innovation investments; and, as a startup founder, I’ve learned that no amount of spending and sunk cost will create a missing market for an otherwise promising idea, yet the bias to justify the past investment and keep feeding the current venture is difficult to resist.

For all of the dramatic shifts I can point to since last year’s conference, including some from the governor that do impress me, politics and support for our oil and gas industry remain the guiding “baseload” assumption of our current economy and the state’s future. And it’s no surprise that the previous governor’s climate-action taskforce plans remain deeply sequestered, and there is no decarbonization or greenhouse gas reduction goal for the state. That said, some recent activities by the governor that impressed me include launching an energy task force, acknowledging the global potential of clean ammonia exports, proposing carbon management legislation, and, a total surprise, use of the United Nations SDGs in an Alaskan sustainable policy report called “The Alaska Standard”!

This year’s Sustainable Energy Conference in Anchorage made one thing abundantly clear: Alaska has a unique opportunity to benefit from the global energy transition and create a more resilient, sustainable, and prosperous future for its people. However, the predominant narrative remains overly reliant on traditional oil and gas resources and keeping oil and gas baseload power generation rooted in our energy systems; dismissing, minimizing, and generally foot-dragging the “intermittent” contribution of new clean energy sources and associated intelligent energy management systems. (Let’s begin by avoiding the clearly pejorative characterization of “intermittent”, and instead use the correct and more constructive “variable”, as in, Variable Renewable Energy, or VRE.)

While the substantial discourse around oil and gas and the state’s economy has historically depended on these industries, a paradigm shift is unfolding within the global energy landscape. The evolution of renewable energy technologies, energy storage solutions, and smart grid systems presents a compelling alternative for Alaska – an opportunity to transition from an excess capacity-sized baseload-centered energy system to one that embraces smart energy systems responsive to variable supply and integrated demand. Our challenge is to avoid the integration grid lock slowing new energy integration seen globally that allows traditional baseload producers to hold off change and delay exposing the massive sunk cost of capital investment to the disruption of cheaper and cleaner alternatives.

In place of continuing dependence and rationalizing extended use of fossil fuels, we have the potential to cultivate an environment of innovative energy practices that could lead to one of the lowest energy costs for communities and our next generation in the nation. Rather than the conference narrative of focusing on not increasing energy costs, the objective should be exploring how to reduce energy costs dramatically, a challenge worthy of $1 billion in gas line funding. Already we are seeing this potential as communities shift from diesel and integrate intelligent energy systems, though admittedly, cost reduction is difficult in the face of massive sunk costs of production capacity debt and the necessary transmission infrastructure capital and operations costs.

For cost reduction, rather than only a cost increase containment goal, we have to change our thinking about using energy. Our current power supply model is rooted in an ‘always-on’ approach to meet any demand, anytime. However, this model is increasingly outdated (pg47). With the urgency of climate change, growing renewable energy capacities, and the advent of new technologies, we’re on the cusp of an energy revolution.

Renewable variable energy sources such as wind, solar, and tidal power have rapidly become more affordable and practical. As Tony Saba at last year’s conference noted, a wind-solar-battery utility-scale power plant is now cheaper to build and operate than just the cost of operating a new gas-fired power plant. (It is no surprise Tony was not invited back after this Q&A with the governor.) These sources can do more than only supplement our energy needs; they can potentially surpass them. The primary challenge is not generation but storage and optimal use and timing or control of demand to match the output of these new power sources. It would be a radical shift in thinking to use energy when we have it rather than expecting unlimited amounts to be available whenever we want. I’ve helped do this in a water treatment plant, saving 30% in energy demand costs with an ROI of only a few months!

Emerging technologies and the integration of power storage offer innovative solutions. Electric vehicles can double as individual power storage units, forming part of a more extensive, distributed network of energy reserves when combined with large-scale storage solutions like flywheels, batteries, and thermal energy storage. (Imagine the potential if every device charged in your home is part of your local and community grid; from a smartwatch, Dewalt drill, laptop computer, flashlight, portable speaker, cell phone, to an EV. )

Moreover, smart grid systems are revolutionizing how we manage power supply and demand. These intelligent systems facilitate a two-way flow of electricity and data, adjusting in real time to fluctuations and increasing overall energy efficiency.

Consider the possibilities of a ‘smart energy system’ that could align power consumption and available storage capacity with the availability of energy supplies. Imagine your home appliances delaying operating until when there’s surplus power, like during peak sunlight hours. Already we have remotely controlled ceramic heaters to absorb excess electricity for later use for home heating. Or your electric car battery catering to evening power demands and charging overnight when tidal power is at its peak. And don’t overlook the massive storage potential of anticipating the end of a solar or tidal energy cycle to increase the heating or cooling of a freezer, water heater, or building spaces to the standard edge of comfort to delay, reduce, or avoid future need for the heating or cooling energy. This energy use optimization minimizes waste, increases utilization of investments in alternative energy, and increases efficiency.

Moreover, such a system could align discretionary power usage with seasonal and cyclical availability. Operations like operating a seafood processing plant or sawmill, processing raw materials, or producing ammonia for winter heating requiring high energy could be designed around the availability of renewable energy, such as our sunny months, utilizing solar power to its full potential, using early season snow melt run off in-run-of-river systems, while wind or tidal energy could be used based on windy weather patterns and tide tables.

The transition to intelligent energy systems necessitates a synergy of policy support and technological innovation. Policies should be developed and adopted that reduce barriers to integrating renewable energy, energy storage technologies, and smart grid development. Concurrently, advancements in smart grid technologies, real-time data analysis, and machine learning algorithms can drive this transition forward.

Moving from a traditional power supply model to an intelligent, balanced system isn’t merely about meeting our power needs. It’s about forging a path to a future that is in harmony with the unique Alaska environment, a path leading to sustainability, efficiency, adaptability, and economic prosperity. For Alaska, this is an opportunity to usher in a vibrant, growing economy and create better prospects for the next generation that might have low or no-cost energy to power their aspirations. We have and will spend enormous amounts of current capital and obligate our next generation and future economy through bonds due to the decisions we are making today.

Let’s seize this moment to redefine our energy models, embracing the era of smart energy systems and ensuring a clean, green, and prosperous future for Alaskans. Necessity, current high costs, and massive federal funding offer the chance to redefine our future, innovate, and thrive.

References and related news

11/18/23 Nathan relates a fascinating transition of the mining industry to pushing for both affordable and CLEAN energy that could be signficant inflection point in state policy around supporting clean energy projects and continued focus on fossil fuel generation. “

Mining exec: Alaska’s pricy, fossil fuel-based power could thwart investment Kinross Gold, whose Fairbanks-area mine employs 700 people, says its Alaska investments have “extremely high” energy costs and carbon emissions compared to other projects in its portfolio. NATHANIEL HERZ NOV 18

Popular Mechanics – Use of home water heaters and heat pumps for energy storage. https://apple.news/AU4Xfwm0QSIiDuD-YYZAQ_Q

ADN 5/28 AK Solar can light path to economic growth

Harnessing Variable Renewables: a Guide to the Balancing Challenge. International Energy Agency (IEA)

Wind-powered Community Microgrids Heat “Boxes of Bricks” in Alaska Homes. Microgrid Knowledge

Tesla quietly adds bidirectional charging capability for game-changing new features. Electrek

Adding capacity to the electricity grid is not a simple task. The Economist

The Alaska Standard”. Office of Governor Mike Dunleavy


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