By Gareth Evans
The recent Alaska Sustainable Energy Conference hosted by Governor Mike Dunleavy highlighted a plethora of exciting developments, opportunities and challenges in the region’s energy landscape. As Alaska continues to navigate the complex interplay between traditional and renewable energy sources, managing old infrastructure while innovating and embracing new and doing so while managing the pristine and vast ecosystem, the state stands at a pivotal moment in its history. Here are some key takeaways from the conference that shed light on Alaska’s energy future and the potential it has to be sustainable and resilient.
The Moon Shot of Our Generation
Multiple times throughout the conference the energy transition was hailed as this generation’s “moon shot.” Alaska has a rich history of innovation in the energy industry, demonstrating adaptability and ingenuity for decades. For instance, the state pioneered the development of the Trans-Alaska Pipeline System in the 1970s, a monumental feat of engineering that allowed oil to be transported from the North Slope to Valdez, the northernmost ice-free port in North America. More recently, Alaska has been at the forefront of microgrid technology, integrating renewable energy sources like wind and solar with traditional diesel generators to power remote communities. The state’s unique challenges and opportunities have spurred innovative solutions, such as the successful implementation of the Golden Valley Electric Association’s battery energy storage system, which is enhancing grid stability and reliability.
It is crucial to the ongoing transition that we first demonstrate the viability of new technologies and then focus on scaling deployment.
Rail Belt and Microgrids: A Dual Approach
Alaska reminded me a lot of working in Western Australia – several larger communities, many small remote communities, a resource-rich economy and challenges managing energy transmission and transportation across vast distances. Alaska’s “Rail Belt” transmission system serves 70% of the population, but faces significant challenges due to aging infrastructure and energy shortages.
One of the most striking challenges facing Alaska today is the paradox of a gas shortage in a state where energy is crucial for both daily living and industrial operations. This issue is particularly noteworthy because three-quarters of the available gas is utilized to power oil field operations. This heavy consumption is necessary to maintain oil production, making the energy production process highly energy-intensive. Gas operations near the Rail Belt are not expected to keep producing in the coming years. Energy for the railbelt today largely comes from gas, coal, hydro, wind and diesel. This results in current energy rates being approximately 25-30 cents per kWh.
In contrast, the remaining power needs for businesses and communities outside of the rail belt, are met by remote microgrids, primarily fueled by diesel. However, there is a growing interest in exploring alternative energy options. Those relying on Diesel microgrids (>82k alaskans), particularly in remote areas, require Diesel to be flown/barged, can experience energy costs to as high as $1.80 kWh. One community discussed how their rates are $1.34 and they had increased 40% in the last year alone. The communities utilize a mechanism called the Power Cost Equalization – to subsidize energy costs to align with those paid in the Rail Belt.
In addition to Energy, there was a discussion about access to clean water and sanitation for communities. It links right back to energy. Energy costs make up to 40% of water operating expenses. In the event of power outages communities have lost access to services for days, weeks and even months at a time as infrastructure quickly freezes and becomes damaged. It is far more cost-effective to proactively manage energy reliability vs having to replace expensive equipment
Harnessing Renewable Potential & New Technologies
Alaska has a vast landscape rich in resources and potential, ranging from hydro to geothermal, oil, gas, wind, solar and huge carbon sinks. At the show, experts shared that based on initial studies, Alaska has the potential to sequester 30 years of global carbon emissions. In addition, the state’s renewable energy technical potential could meet the United State’s entire energy demand and more. The challenge lies in effectively harnessing and transporting this energy to market, with hydrogen being discussed as an emerging potential solution.
The conference also highlighted the potential of advanced nuclear technologies. The state of Wyoming shared their case study, whereby they are developing two Nuclear opportunities, one with TerraPower and the other with BWX Technologies. Wyoming is keen to demonstrate the viability of nuclear as part of the energy mix and support the complete supply chain from Uranium mining through to producing the materials and labor to build and operate the facilities. Like Alaska they have lots of resources, vast spaces and transferable oil and gas expertise.
Collaboration and Development
It was impressive that the Governor sponsored and hosted the conference and learning more about the legislative progress being made to move opportunities forward. That said there was still friction between communities, governments, private companies and the regulatory bodies. One government representative complained about how the administration had limited their access to resources. Meanwhile, someone from the EPA indicated that the footprint for development had been limited, but there was significant collaboration with industry so production would not be impacted. They felt this was a great compromise and supported more sustainable development.
There is also a balancing act between resource development, retaining and protecting cultures, economic prosperity and creating opportunities for local communities. Resource projects like Red Dog Mine and the O&G developments on the North Slope provide many jobs with one job providing income for multiple families. One quote was “it is going to be a sad day when we are starving and resources are still in the ground”. Development needs to happen in coordination and collaboration (vs divide and conquer strategies) with the native communities as they have been and continue to be the stewards of the land.
Policy is essential to unlocking Alaska’s energy potential. The state has the opportunity to lead in creating cheap, clean, and reliable energy. Collaborative efforts between public and private sectors, as well as indigenous communities, are crucial for sustainable development.
Data, AI and Digital Twins
Innovations in AI and digital technologies are set to revolutionize Alaska’s energy landscape as they are globally. Technology can expedite and improve planning, design, deployment and operations of energy systems. Alaska-based Kartorium’s digital twin technology helps organizations manage their physical assets and document their systems and processes. The outcome being enhanced decision-making, increased operational efficiency, and improved asset management. VECKTA is excited to partner with Khatorium to support communities in Alaska (and beyond) to plan, deploy and manage cleaner, more affordable microgrid energy solutions through the Energy Shed Project, led by LaunchAlaska and the DOE.
Another interesting discussion was around data centers – the primary markets for data centers have no more power to give and this has the potential to limit development. Is there an opportunity for Alaska to co-develop data centers with energy infrastructure?
Financing, Capacity & Coordination
It was validated by investors, banks and private companies that the energy transition is one of the most investable themes now and for decades to come. There is plenty of money out there for good projects. Combined with strong financial returns, organizations can facilitate positive social and economic impacts.
What surprised me was the current and heavy reliance on grants to pay for projects. The state has become very adept at accessing huge sums of federal dollars through grants. This comes in waves and is not sustainable. It was discussed that projects, businesses and communities need to focus more on leveraging private capital and free market dynamics.
I understood from being at the conference how complex this transition is for businesses and particularly communities. There are many pain points, opportunities, options and agencies trying to help. Individuals spoke of being overwhelmed, not knowing where to start or what the right solutions would be. They spoke of being tired of applying for and managing grant applications and trying to understand which agencies to engage and work with. Even for the agencies themselves they were cobbling solutions together between organizations trying to make progress – everyone with the right attitude and intentions but limited by their mandates, funding and visibility of opportunities.
It seems like there needs to be better macro coordination and planning to support sustainable and holistic development. This is why I am passionate about what we are doing at VECKTA: providing agnostic, independent, data, processes and workflows to confidently plan, design, buy and deploy the right energy system for the specific needs, objectives and constraints.
Projects Start with People
Alaska has always been an energy innovator, and the insights from this conference reaffirm the state’s potential to lead in the transition to a sustainable energy future. By leveraging its vast natural resources, embracing technological innovations, and fostering collaboration, Alaska can realize the moon shot and set its self up for success today and decades to come. The collective will for action, coupled with available technologies and funding, provides a solid foundation for success. As we move forward, it’s essential to remember that projects start with people, and we must collaborate and innovate to realize collective success. With affordable, reliable and clean energy in abundance, everything is possible.
