By Stephanie Nowers | Islanded Grid Resource Center
ANCHORAGE — Ten years ago, the board and managers at Kodiak Electric Association (KEA) on Kodiak Island in Alaska faced a choice. They could continue to rely on expensive diesel fuel for generating a bunch of their electricity, a choice that was costing them nearly $7 million a year. Or they could find an alternative. They chose the latter, forging ahead with an ambitious plan to add wind power to their system and by 2020 be 95% renewably powered. Not only did KEA meet their goal, they surpassed it – six years ahead of schedule.
So far, in 2014, the utility has been 99.7% renewably powered, with 14% coming from wind and the utility’s Terror Lake hydro facility providing the rest of the power. The buzzing diesel engines that once generated 20% of the electricity for the bulk of the island’s 15,000 residents now sit mostly idle, said Kodiak Electric CEO Darron Scott.
“They get turned on about quarterly just to check them and for when the utility does scheduled maintenance on its hydro systems, ” he said.
MAKING WIND WORK
The switch to 100% wind and hydropower has been a true success story for the community. Kodiak, located in Southcentral Alaska, is best known for its thriving seafood industry, giant brown bears and picturesque setting. However, like other remote communities with small populations, the cost of energy is high with electricity running about 16 cents a kilowatt hour, or about half again as much as the national average of 10 cents a kilowatt hour. A lot of that added cost was due to the utility’s reliance on diesel fuel, the cost of which can fluctuate significantly.
Combined with upgrades to their hydropower system, the switch to wind power has saved the utility an estimated $22 million in avoided diesel fuel costs since the first turbines were installed in 2009. The utility in turn has passed those savings on to its customers lowering rates by nearly 5% since 2001. In comparison, during the same period, retail electricity rates nationwide have risen by 50%.
Adding the wind power has also brought other benefits, including reducing carbon dioxide emissions by 62 million pounds a year. In addition, idling the engines has lowered maintenance costs and reduced the need for replacement diesel engines. Also significant is that eliminating the need for diesel has insulated the utility long-term against the price spikes in diesel fuel costs over which it had little control and had to pass on to customers. Prior to installing wind power, the utility had been burning about 2.8 million gallons of diesel a year, with a fuel price that fluctuated significantly but averaged $2.46 per gallon.
Making the jump to 100% renewable electricity was not a simple, overnight project. The wind power has been added in stages, and Scott noted careful planning has been a key to success. The first turbines – three GE 1.5 megawatt (MW) turbines – went up in 2009 on Pillar Mountain just above the city of Kodiak, generating a few nail-biting moments as the trucks transporting the huge blades navigated the steep and winding hillside path with sometimes just a few inches of clearance. In 2012, the utility expanded the wind farm, adding three more GE 1.5 MW turbines. The utility has also installed a third generator at their hydropower plant and a 3 MW battery system to help absorb the variability of the wind power.
This fall, the utility also plans to install two 1 MW each ABB flywheels that will enable a new 2 MW electric crane to operate at the city’s busy port. The total cost of the upgrades and added wind power to date has been about $55 million, making the payback on the system about 9 years at the utility’s current diesel fuel costs and electric production, Scott said.
Scott has been more than willing to share the utility’s story – both the successes and challenges – as a way to help other communities considering wind power or other renewables. In addition to speaking at conferences, he now serves on the advisory board of the Islanded Grid Resource Center (IGRC), a partnership of Renewable Energy Alaska Project (REAP) based in Anchorage, the Island Institute based in Rockland, Maine and the US Department of Energy’s WindExchange program. The IGRC serves as a knowledge center for islanded grids and island communities throughout the United States, said REAP’s Executive Director Chris Rose.
“Kodiak’s story is pretty remarkable, and is something that we’re working to share with as many people as we can,” Rose said. “There are thousands of people in U.S. states and territories still heavily reliant on diesel, and many of them live in places with outstanding wind resources. We can all benefit by connecting technical experts in integrating wind into islanded grids with others in places that are still exploring what alternatives they may have.”