Econ 919 – State big fan of local wind and landfill projects

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Grant money will not necessarily make or destroy an energy project.

But it can definitely help.

“It makes them more attractive to the board. This makes them more financially attractive,” said David Thomas, director of strategic services for the Homer Electric Association. One of its tasks is to help the cooperative transition to more renewable energy sources.

He spent part of his winter vacation last year filling out grant applications for the Renewable Energy Fund, a state program aimed at reducing development costs for cut-rate 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’ grant application efforts paid off. The five projects submitted by HEA submitted were recommended for financing by the Alaska Energy Authority, which oversees the fund.

This means that as long as there is 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 get the final design done, that’s 8% of the project, the payback on the project probably happens a year earlier…that just makes it better on the economic plan,” 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 and burn it. for the HEA network.

Some of this power would be used to evaporate the leachate (trash juice) at the dump itself.

The promoters of the project claim that it would represent significant cost savings for the borough. In a conversation moderated by Cook Inletkeeper this week, HEA’s Mike Salzetti said he was excited about the Renewable Energy Fund opportunity.

“I am really optimistic that if we have a project ready to go, there will be additional grants for a project like this. It’s really one of those win-win-win type projects,” he said.

The other projects on file with HEA are four wind projects, on different sites – Nikiski, Ninilchik, Summit Lake and Caribou Hills.

The idea is that one of these sites could be suitable for a wind project of nine 30 megawatt turbines on the road.

And the cooperative wants to test all four before committing to just one. It will place weather towers at each location to get 365 days of data to determine if a site is ready for the task or not.

Getting this 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 of ​​computer modeling,” she said. “But computer modeling isn’t perfect, especially in complicated, mountainous places like Alaska.”

Each site has different pros and cons. These factors, in turn, can impact the economics of a project.

“So, for example, you look at Summit Lake – it’s a place that’s 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 that HEA will do the first steps in parallel. Feasibility studies take time, as each site needs a year of data. So McKittrick says it’s important to get them all working at the same time.

HEA is requesting approximately $200,000 in funding per location.

The Alaska Energy Authority also recommended that the state fund a feasibility study for the Dixon Diversion Project — a plan to increase capacity at the company’s Bradley Lake hydroelectric project in Kachemak Bay using water from a retreating glacier. The grant would put $1,000,000, plus a matching $1,000,000, into a feasibility study for the expansion.

Previous rounds of the Renewable Energy Fund helped fund similar studies at Mt. Spurr, for geothermal power and another wind project at Nikiski. There have been several wind feasibility studies on the Kenai Peninsula in recent years, but these data are outdated and none of these projects have come to fruition.

Some permit costs for Grant Lake were also identified by the program. This is the current plan to establish a hydroelectric project in Moose Pass.

That’s a lot of projects to follow. Utilities like HEA are juggling numerous early-stage renewable energy programs in hopes of building their renewable energy portfolios to complement existing, more expensive fuel sources like natural gas. This is how HEA gets nearly 90 percent of his energy today.

Alaska Energy Authority executive director Curtis Thayer said his agency was able to recommend more projects than usual this year. He went through 27 of the 39 applications he received.

“When the state was very dollar rich, then we had robust programs, robust REF,” Thayer said. “But if the state didn’t have the money, then we didn’t have the funding levels. And several years, we didn’t even do a solicitation.

He said funding early stage projects – including feasibility studies – should give recipients some security to take the next step and secure funding for further stages of those projects.

Another benefit of grants, Thomas said, is that state-funded projects are available to the public. Thus, cooperatives do not have to reinvent the wheel with each new project design or feasibility study.

“So there’s a broader advantage beyond the Peninsula or Homer Electric,” he said. “Because the data is public for anyone who wants to use it.”

If the fund is approved in the final state budget, all 27 programs, including HEA, 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.

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