NREL offers technical analysis, funding referral to utilities seeking to transition from dependence on fossil fuels
Fairbanks-based Golden Valley Electric Association is working with the National Renewable Energy Laboratory on a plan to shut down one of the state’s last coal-fired power plants. The utility will replace Healy Unit 2 with wind power to reduce the co-op’s reliance on price-volatile fossil fuels, which generate 90 percent of its electricity. The goal is to stabilize and reduce rates that are among the highest in the country.
The Healy power plant was built in the 1990s by the federal Department of Energy as a demonstration project for so-called clean-coal technology, but the agency shut it down after two years of unsuccessful efforts to bring it into operation. Golden Valley bought the plant in 2013, but the utility also was unable to keep the plant running. And last year the co-op’s board voted to shut it down.
“After a certain point of time, you’ve got to stop banging your head against the wall,” says John Burns, Golden Valley’s president and CEO.
Burns says Golden Valley leadership thought Healy 2 could be modified to operate and provide cheap and reliable electricity generated by coal. But the technology that many considered promising proved unworkable.
“And so, when Healy 2 is projected to run and doesn’t run, we are left with scrambling around to find alternative energy to take over from that loss,” he said in a recent interview.
When that happens, Golden Valley always tries first to buy power from utilities in Southcentral Alaska that generate lower-cost electricity with natural gas and hydro. But when those utilities don’t have surplus power to send up the interties, the co-op must replace Healy 2’s output with backup power it generates, mainly with diesel and naphtha.
When that happens, Golden Valley always tries first to buy power from utilities in Southcentral Alaska that generate lower-cost electricity with natural gas and hydro. But when those utilities don’t have surplus power to send up the interties, the co-op must replace Healy 2’s output with backup power it generates, mainly with diesel and naphtha.
Burns says that makes it hard for Golden Valley and its members to plan their budgets.
“That cost of power can go up and down huge -- y’know, huge vacillations,” he said. “And how do you plan?”
Golden Valley generates 90 percent of its electricity with fossil fuels, and its customers face some of the highest electricity costs in the nation. That includes coal, which is cheaper than liquid petroleum-derived fuels but also the dirtiest, in terms of the amount of carbon is produces. The co-op generates up to 28 megawatts with its Healy Unit 1, and it buys up to 25 megawatts from the Aurora Energy plant in Fairbanks.
The pandemic and its ripple effects aggravated the volatility of fuel prices, which Golden Valley passes along to its members. Burns says that between June 2020 and June 2022, the fuel-purchase charge on customers’ monthly bills doubled.
“Our ratepayers -- they’re pretty patient,” he said. “They understand that we don’t control the price of power, because it’s a pass-through. But what they demand and what they’re entitled to is to ask the question ‘Well, what are you going to do about it?’ ”
Golden Valley answered that question by deciding to replace Healy 2’s output mainly with wind. The plan calls for integrating larger wind farms into Golden Valley’s system, along with better technology and battery energy-storage systems to back-up all that variable power. And for help with that, they turned to the National Renewable Energy Lab, or NREL.
“The focus is of course is dealing with the aging power plant replacement here, and to lower costs and also to lower emissions” says Bruno Grunau, regional director of NREL’s Cold Climate Housing Research Center in Fairbanks.
Grunau says NREL chose Golden Valley for a pilot project to test the capabilities of the lab’s Clean Energy to Communities program.
“So, when folks were creating this program, they thought ‘What’s a tough nut to crack, in terms of a clean-energy transition?’ And wouldn’t you know, it turned out to be ours, right?”
Sherry Stout, who manages NREL’s State, Local and Tribal programs, agrees.
“If we can do it in some of the hardest places on Earth, that makes it easier for us to do it in some of the easier places,” she said.
Stout, who’s based out of the agency’s headquarters in Golden, Colo., has worked with utilities around the country and in Alaska, so she’s aware of the state’s unique energy challenges, especially in integrating renewable energy into a small grid.
“Down here, Lower 48 -- it’s pretty easy to slap solar on the grid, in most places,” she said. “Some solar and batteries, wind. … Fairbanks isn’t that, as you well know. Fairbanks is a winter-dominated load.”
Stout says the lab has learned a lot about how Golden Valley has managed that load, and how it plans to transition from its reliance on fossil fuels to renewable energy and attain its goal to reduce its carbon emissions by 26 percent, based on its 2012 emissions, by 2030.
Golden Valley now generates up to 25 megawatts with its Eva Creek Wind farm, and buys up to 2 megawatts of wind power from Delta Junction-based Alaska Environmental Power. The co-op also produces up to a half-megawatt of solar with its solar farm in Fairbanks.
“We’ve got a great partner in Fairbanks -- great partners in terms of providing data,” she said. “Data’s a huge part of this.”
Stout says NREL also relied on data and research conducted by the University of Alaska Fairbanks’ Alaska Center for Energy and Power, along with state agencies and other Railbelt utilities. She says that kind of coordination is essential, not only for helping Golden Valley transition but also to enable the co-op to coordinate with those other utilities as it brings more wind power online. That must be done as part of the effort to revamp the Railbelt power system.
“Obviously, it’s a hugely important issue to the state,” she said. “Whether it’s just an upgrade to the existing intertie or potentially doing some sort of loop that’s also been proposed.”
That’s what Glennallen-based Copper Valley Electric Association officials, among others, have proposed: building a power line from where Golden Valley’s system ends west of Fort Greely to where Copper Valley’s system ends near Paxson. That would make the Railbelt system more like a true grid, because it allows the utilities another route to provide electricity to others that need it.
Burns says Golden Valley’s ability to send and receive electricity from other Railbelt utilities is limited, because its system goes only one way, from where it connects with the Alaska Intertie south of Healy; to Dot Lake, south of Delta Junction on the Alaska Highway and, on the Richardson Highway, the area west of Fort Greely.
“It is literally like a 700-mile extension cord that is essentially Third World,” Burns said in a commentary posted to Golden Valley’s homepage. “Upgrading the transmission system will allow additional integration of renewables, it will allow diversification and it will allow redundancy and resiliency.”
Stout says Golden Valley’s plans to upgrade its system must take into account the utilities’ overall effort, with the state’s help, to upgrade the rest of the Railbelt system. She says NREL has studied the Railbelt and proposals for upgrading it, and addresses that in an analysis conducted last year upon a request by Gov. Mike Dunleavy. The report, issued last year, addresses among other things the technical feasibility of Dunleavy’s proposal to generate 80 percent of the state’s power with renewable energy, as outlined in a proposed state Renewable Portfolio Standard that the Legislature is considering adopting.
“That report was on the technical feasibility -- ‘Can you do this?’ ” Stout said. “And the report that we’ll be following up with later this year is on the financial feasibility -- what does this actually mean, in terms of cost?”
That’s a huge concern for co-ops and their members, she said.
“A lot of cooperatives just don’t have all the cash in the world to go hire consultants to think about all this, because eventually that gets rate-based to all the members of the co-op,” and shows up in their monthly bills, she said.
Stout says the NREL has expertise and information on funding sources, like the federal infrastructure bills Congress adopted in 2021 and ’22. And she says the agency wants to share all that with other co-ops that are trying to reduce their dependence on fossil fuels.
Editor's note: Community members can learn more about the Clean Energy to Communities program and how to get involved at www.nrel.gov/c2c/indepth
