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The Integrated Resource Plan For the Alaskan Railbelt A Rational Economic Plan for the future December 9 th , 2009 James S. Strandberg, P. E. Alaska Energy Authority RIRP Program Manager. A Rational Plan for the Railbelt. The looming future Economic uncertainty Aging generation - PowerPoint PPT Presentation
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The Integrated Resource PlanFor the Alaskan Railbelt
A Rational Economic Plan for the future
December 9th, 2009James S. Strandberg, P. E.
Alaska Energy AuthorityRIRP Program Manager
The looming future Economic uncertainty
Aging generation Traditional fuels more expensive and
becoming scarce A time for decisions – and actions
By Railbelt Utilities and the State of Alaska
The Alaska Railbelt IRP 2
A Rational Plan for the Railbelt
December 9th, 2009
A Rational Plan for the Railbelt
Railbelt residents needPlentiful, reliable, power supplies for
consumers at stable, predictable prices
To provide this, Railbelt Utilities need
Access to reliable, long term, wholesale power supplies at stable
prices
The Alaska Railbelt IRP 3December 9th, 2009
To achieve long run controlled economic development
Maintain our Alaskan quality of life
The Alaska Railbelt IRP 4
A Rational Plan for the Railbelt
December 9th, 2009
The Alaska Railbelt IRP 5
A Rational Plan for the Alaska Railbelt
A few words on the national trend towards embracing renewable
energy futures
You may see some of these trends as you view the Alaska Railbelt Integrated Resource draft plan.
December 9th, 2009
The Alaska Railbelt IRP 6
The performance of many technologies follows an S-curve, when years of slow gains precede rapid improvements that eventually flatten out at a physical limit.
Wind and geothermal power appear to be entering their most fruitful phase, while fossil fuel power looks to be stagnating.
A Rational Plan for the Alaska Railbelt
Source: Mechanical Engineering Magazine, December 2009, Jeffry Winters, reporting on analysis by Melissa Schilling, Stern School of Business, New York University
December 9th, 2009
The Alaska Railbelt IRP 7
A Rational Plan for the Alaska Railbelt
Source: Mechanical Engineering Magazine, December 2009, Jeffry Winters, reporting on analysis by Melissa Schilling, Stern School of Business, New York University
Energy cost versus cumulative R&D Spending – Wind Power
December 9th, 2009
The Alaska Railbelt IRP 8
A Rational Plan for the Alaska Railbelt
Source: Mechanical Engineering Magazine, December 2009, Jeffry Winters, reporting on analysis by Melissa Schilling, Stern School of Business, New York University
Energy cost versus cumulative R&D Spending – Geothermal Power
December 9th, 2009
The Alaska Railbelt IRP 9
A Rational Plan for the Alaska Railbelt
Source: Mechanical Engineering Magazine, December 2009, Jeffry Winters, reporting on analysis by Melissa Schilling, Stern School of Business, New York University
Energy cost versus cumulative R&D Spending – Fossil Fuel Power
Unit Costs of power increasing
December 9th, 2009
The Alaska Railbelt IRP 10
As the world turns, our energy future evolves before our eyes
December 9th, 2009
•Robust transmission•Diversified fuel supply•System wide power rates•Spread risk•State financial assistance•Regional planning •Wise resource use•Respond to large load growth•Technical resources •New technologies
•Limited redundancy•Limited economies of scale•Dependence on fossil fuels•Limited Cook Inlet gas deliverability & storage •Aging G&T infrastructure•Inefficient fuel use•Difficult financing •Duplicate G&T expertise
Transition
The Integrated PlanEmbraces these
concepts
11The Alaska Railbelt IRP
Our present Situation
Embrace our future together
A Rational Plan for the Railbelt
December 9th, 2009
The Alaska Railbelt IRP 12
Some Definitions REGA means “Railbelt Electrical Grid
Authority” GRETC means “Greater Railbelt Energy &
Transmission Company” RIRP means “Railbelt Integrated Resource
Plan”
REGA study determined the business structure for future Railbelt G&T
GRETC initiative is the joint effort between Railbelt Utilities and AEA to unify Railbelt G&T
RIRP is the economic plan for future capital investment in G&T and in fuel portfolios that GRETC would build, own and operate
Three Discrete Tasks
A Rational Plan for the Railbelt
December 9th, 2009
The Alaska Railbelt IRP 13
What is the Railbelt Integrated Resource Plan?
Answer: A plan for developing the Railbelt’s
Electrical Grid to meet our energy future ◦ Through phased construction of◦ New power generation◦ New transmission lines◦ New fuel portfolio projects
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 14
What kind of fuel and energy sources are considered?
Answer: All viable energy sources
◦ Natural Gas◦ Coal◦ Petroleum◦ Renewable Energy
Hydro energy Wind energy Geothermal energy
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 15
What kind of power plants are considered? Answer:
◦ Fossil fueled power plants Coal Natural gas Petroleum
◦ Hydro-electric power plants◦ Wind generators◦ Geothermal power plants
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 16
A Rational Plan for the Alaska Railbelt
How does the RIRP work with the proposed Railbelt Restructuring Initiative that is before the Legislature called GRETC?
December 9th, 2009
The Alaska Railbelt IRP 17
A Rational Plan for the Railbelt
CurrentSituation
• Limited redundancy
• Limited economies of scale
• Dependence on fossil fuels
• Limited Cook Inlet gas deliverability and storage
• Aging G&T infrastructure
• Inefficient fuel use
• Difficult financing
• Duplicative G&T expertise
RIRP Study• Plan that economically
schedules what, when, and where to build, based on available fuel and energy supplies
• 50-year time horizon
• Competes generation, transmission, fuel supply and DSM/energy efficiency options
• Includes CO2 regulation
• Includes renewable energy projects
• Arrives at a plan to build future infrastructure for minimum long-run cost to ratepayers
• Considers fuel supply options and risks
RIRPResults
• Increased DSM/energy efficiency
• Increased renewables
• Reduce dependence on natural gas
• Increased transmission
GRETC - Enabler
REGA Study
Proposed GRETC
Formation
Future Situation• Robust transmission
• Diversified fuel supply
• System-wide power rates
• Spread risk
• State financial assistance
• Regional planning
• Wise resource use
• Respond to large load growth
• Technical resources
• New technologies
10-Year Transition Period
Financing Options• Pre-funding of capital
requirements
• Commercial bond market
• State financial assistance (Bradley Lake model)
• Construction-work-in-progress
December 9th, 2009
The Alaska Railbelt IRP 18
A Rational Plan for the Alaska Railbelt
The RIRP conforms with GRETC organizational Concepts
Transition the Railbelt to a fully functional G&T entity over a 10 year transition period
After year 10, provide all requirements power, to Railbelt distribution utilities◦ at a system wide rate◦ With equal reliability◦ From a diversified power portfolio
December 9th, 2009
The Alaska Railbelt IRP 19
The RIRP is a tool for: ◦The G&T entity GRETC, as owner and
operator of the network◦The AEA, as a potential “banker”, or
bonding entity◦The Legislature, as a potential source of
capital for GRETC.
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 20
The RIRP assumes ◦Formation of GRETC◦Transition to unified operation within 10
years Conclusions of B&V RIRP on GRETC:
◦While not impossible to pursue the RIRP without GRETC, it would be very difficult
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 21
Evaluation Scenarios
December 9th, 2009
A Rational Plan for the Alaska Railbelt
The Alaska Railbelt IRP 2222
Watana DamDevil Canyon Dam
Watana ReservoirDevil Canyon ReservoirN
Potential Project Sites
High Devil Canyon Dam
December 9th, 2009
The Alaska Railbelt IRP 23
Susitna Hydroelectric Project
December 9th, 2009
A Rational Plan for the Alaska Railbelt
The Alaska Railbelt IRP 24
Results of the Railbelt IRP
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 25
Energy By Resource Type
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2011
2014
2017
2020
2023
2026
2029
2032
2035
2038
2041
2044
2047
2050
2053
2056
2059
ENER
GY(
GW
h)
Ocean Tidal
WindMunicipal Solid Waste
Geothermal
HydroPurchase Power
Fuel Oil
Nuclear
CoalNatural Gas
A Rational Plan for the Alaska Railbelt
Source: B&V RIRP report – pg. 1-13
Scenario 1-B
December 9th, 2009
The Alaska Railbelt IRP 26
Conclusions – Preferred Resource Plan
DSM/EE Programs (2011) Anchorage and GVEA MSW (2012) Fire Island Wind (2012) Southcentral Power Plant (2013) Glacier Fork Hydro (2015) Nikiski Wind (2017) Anchorage Simple Cycle Turbine (2018) GVEA Combined Cycle (2020) Parallel pursuit of Chakachamna/Susitna/Glacier
Fork Multiple transmission projects
December 9th, 2009
A Rational Plan for the Alaska Railbelt
The Alaska Railbelt IRP 27
Energy Requirements (MWh)
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
2011
2014
2017
2020
2023
2026
2029
2032
2035
2038
2041
2044
2047
2050
2053
2056
2059
Year
Ene
rgy
Req
uire
men
ts (M
Wh)
Without DSM/EE
With DSM/EE
Results – DSM/EE Resources
A Rational Plan for the Alaska Railbelt
Source: B&V RIRP report
December 9th, 2009
The Alaska Railbelt IRP 28
RIRP Plan 1A Capital Expenditures and Debt Capacity of the Railbelt Utilities
Capital Expenditures
High Debt Capacity
Low Debt Capacity
Source: B&V RIRP report, Seattle Northwest Securities
Conclusions – Financing the Future
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 29
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Year
Ann
ual C
ost o
f Pow
er ($
000,
000)
Scenario 1A With CommittedUnitsScenario 1A Base Case
Conclusions – Regional or Individual Utility Future
A Rational Plan for the Alaska Railbelt
Source: B&V RIRP report
December 9th, 2009
The Alaska Railbelt IRP 30
Schedule for completing the Railbelt Integrated Resource Plan
Technical Conference – December 10th, 2009, Captain Cook – Black and Veatch RIRP Project Manager Mr. Kevin Harper and members of
consultant team will explain the results of Railbelt Integrated Planning to the public.
Public Comments accepted to January 6th, 2010. Final Report to be issued on January 13th, 2010.
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 31
AcknowledgementsAEA Co-Project Manager Mr. Bryan CareyPrime Consultant: Black & Veatch
Mr. Kevin Harper, P. E.Mr. Myron Rollins, P. E.
Susitna Hydro Project Consultants HDR, R&M ConsultantsMr. Robert Butera
Railbelt Grid Stability/Wind Integration EPSMr. Dave Burlingame, P. E.
Financial Analysis Seattle Northwest SecuritiesMr. Jeb Spengler, Mr. Richard Schober
Review and technical Support The six Railbelt Electric Utilities staffsConsultation and Advice The Railbelt Utility Board Task ForceGovernor’s Office Support Mr. Joseph BalashAEA Executive Director Mr. Steve HaagensonAEA technical support Ms. Sherrie Siverson
Ms. Shauna HowellMr. Chris Rutz
A Rational Plan for the Alaska Railbelt
December 9th, 2009
The Alaska Railbelt IRP 32
On behalf of the Alaska Energy Authority, thank you for your time and attention.
James S. Strandberg, P. E.RIRP project manager
Questions???
A Rational Plan for the Alaska Railbelt
December 9th, 2009
