Improving economies of scale and encouraging investment in rural workforce development are among the top recommendations of a new report addressing sustainable energy solutions for rural Alaska utilities. Sustainable Energy Solutions for Rural Alaska also suggests increasing utility accountability, providing incentives for performance, and fostering a larger role for independent power producers and other third-party service providers. The report presents more than a dozen recommendations intended to serve as a pathway for rural Alaska utilities to reduce costs and ultimately become more self-sufficient.
Sustainable Energy Solutions for Rural Alaska was sponsored by the U.S. Department of Energy Office of Indian Energy Policy and Programs and was authored by researchers from the Regulatory Assistance Project (RAP) and Lawrence Berkeley National Laboratory (LBNL). The study was conducted over the course of 18 months and involved in-person interviews with utility staff and community members from more than 30 rural communities located across all parts of Alaska.
The team confirmed what many rural Alaskans already know, including the fact that many communities rely almost exclusively on expensive diesel fuel—shipped in by barge or air—for electricity generation and heat. As a result, rural utilities pay significantly more—in some cases five to ten times more—for fuel and electricity than the more populous regions of the state that are interconnected by roads, transmission lines, and other energy infrastructure. While government programs have helped to some extent, tighter state and uncertain federal budgets are creating unprecedented challenges for rural Alaska utilities and the communities that they serve.
Dr. Peter Larsen, a co-author of the report and a research scientist from LBNL, noted that in recent years many rural communities have upgraded their diesel generators, installed energy conservation measures, and integrated alternative sources of electricity into the diesel-based systems as a way to increase independence and manage costs.
Despite this progress, the report shows that there are still more opportunities for Alaska’s rural communities to develop and demonstrate solutions to these challenges. Larsen notes that, “we met people in rural Alaska who are already implementing innovative and cost-effective solutions that rival some of the most progressive utility systems in the world—these success stories need to be shared with other communities across Alaska and the Arctic.”
Riley Allen, lead author of the report and RAP research director, is hopeful that over time, “emerging renewable energy technologies, combined with secondary loads, advanced power system controls, and energy efficiency programs, will lower costs and increase self-sufficiency across rural Alaska and beyond.”
Key recommendations of the report include:
Encouraging rural utilities and communities to achieve economies of scale. While many utilities in rural Alaska have already achieved economies of scale by joining larger public and private systems, communities and utilities should work with regional organizations to realize scale in planning, management services, logistics, fuel purchases, specialized technical services, and to attract and negotiate favorable terms from third-party service providers.
Increasing the role for independent power producers and other third-party service providers. More rural utilities should explore avenues for working with independent power producers, which often bring access to new sources of capital, experience, innovative technologies, and an opportunity for lower costs. In addition, third-party service providers have already made a difference in many communities and can help with specialized needs including advanced customer meters, managing budgets, logistics, engineering, bookkeeping, and other services.
Encouraging investment in rural workforce development. Workforce programs should be expanded to help rural utilities train and retain staff with expertise in billing and financial operations, grant and loan applications, capital planning, and operation of advanced hybrid renewable power systems.
Improving accountability and aligning financial incentives with performance. More customer-focused reliability standards and incentives tied to performance would encourage utility management and community leaders to place a greater emphasis on the cost and quality of service utilities provide.
The report also suggests, among other recommendations, accelerating the testing and adoption of emerging technologies, strengthening the commitment to energy efficiency, and enhancing the role for cost-effective renewable energy.