Alaska’s Railbelt power system serves three-quarters of electric demand in Alaska and has a peak demand of 750 MW. The Railbelt operates as an electrical “island” and is not connected to the larger North American grids. This geographic isolation presents unique challenges for reliably integrating renewable energy relative to larger electrical interconnections with more resource diversity, but also offers opportunities for wind to reduce consumption of high-cost fuel for power generation.
To better understand the impact of expanded wind energy on the Railbelt grid, E3 was retained by the four largest Railbelt utilities – Golden Valley Electric Association, Matanuska Electric Association, Chugach Electric Association, and Homer Electric Association – to conduct a detailed production simulation and wind integration study. The study evaluates the integration of 300 megawatts (MW) of new wind capacity, which is enough wind energy to serve over 25% of the Railbelt’s annual electric energy needs and as much as 70% of its instantaneous demand. Using a two-stage PLEXOS production cost model, E3 conducted detailed operational simulations of the existing Railbelt generation, transmission, and storage assets to answer key questions regarding system reliability, fuel savings, and emissions reductions.
Key Findings: Reliability, Costs, and Emissions
The study finds that, with optimized operational practices, the Railbelt can reliably integrate 300 MW of new wind generation. Using a high-resolution five-minute dispatch model, E3 found no loss-of-load events and minimal reserve shortages, ensuring that system reliability can be maintained with increased wind penetration.
From a cost perspective, additional wind generation is expected to significantly reduce fuel consumption and variable operations and maintenance (O&M) costs. The analysis estimates annual operational cost savings of $97–$126 million by 2030, primarily from reduced reliance on natural gas (Figure 1). On average, each megawatt-hour (MWh) of wind generation is projected to lower operational costs by $82–$106. Our study does not estimate the cost to install, interconnect, and operate the wind plants and does not determine whether adding new wind would reduce costs for electric ratepayers.
Beyond cost savings, integrating 300 MW of new wind energy would substantially reduce greenhouse gas emissions. The study projects a 25% decrease in system-wide CO2 emissions, cutting annual Railbelt-wide emissions from 2.0 million metric tons to 1.5 million metric tons.
Managing Variability and Uncertainty: The Role of Legacy Railbelt Assets
The study highlights the crucial role of Railbelt’s existing resources—hydroelectric plants, battery storage, thermal resources, and transmission infrastructure—in managing wind variability and forecast uncertainty. For instance:
- Transmission lines play a critical role in balancing supply and demand across the Railbelt. The study finds that transmission flows along the main Railbelt transmission lines become much more variable with more wind generation, and transmission is sometimes more valuable when used to deliver operating reserves than electric energy.
- Hydroelectric resources, such as the 120 MW Bradley Lake project, can be dispatched flexibly to balance wind fluctuations.
- Thermal generation can increase output when wind resources produce less than forecasted. This backup service is important to operating the grid reliably with more wind.
- Battery storage helps to smooth short-duration wind variability but is less effective at managing multi-hour wind forecast errors.
Looking Ahead: Operational Enhancements to Enable More Wind Power
A key caveat to the study is that E3, under guidance from the Railbelt utilities, assumed seamless, fully optimized operations across the Railbelt. This means that the simulated system is far more flexible than current operational practices would allow.
To fully realize the benefits of wind energy, the study recommends that the Railbelt explore several potential enhancements to Railbelt operations, including:
- Coordinated, Railbelt-wide unit commitment and dispatch
- Transmission scheduling without wheeling charges
- Co-optimization of energy and reserves
- Improved use of day-ahead wind forecasts in system operations
- Increased flexibility in gas fuel nominations
These steps would not only support wind integration but could also improve system-wide efficiency.
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This study was prepared by Jimmy Nelson, Chen Zhang, Saamrat Kasina, Sam Kramer, Alexandra Gonzalez, Zach Tzavelis, Chris Herman, and Arne Olson.
