Ryan Schuessler

Alaska island goes renewable amid rising electricity prices

In the state with the second-highest electricity prices, thousands of Alaskans live primarily on hydro and wind power

KODIAK, Alaska — Mountains, bears and bountiful salmon fishing are among the things Kodiak, Alaska’s “Emerald Isle,” is known for. But more and more, something else is being added to that list: wind turbines.

In Alaska and across the rest of the United States, electricity rates continue to rise, but not in Kodiak. Since 2001, Kodiak residents’ electric rates have dropped by 5 percent; in the same period, the national average has risen 50 percent. That drop can be credited in part to the wind turbines that now line the top of Pillar Mountain overlooking Kodiak’s harbor.

But Kodiak’s successful transition to an electric grid run almost entirely off renewable energy isn’t the norm. Nationwide, less than 10 percent of electricity comes from such sources. In Alaska, which is estimated to be home to more than 90 percent of the country’s river current and tidal energy, only 50 of some 200 remote communities utilize any renewable energy.

Analysts cite financial and policy barriers as having prevented small communities across the United States from implementing renewable grids, but they also say Kodiak’s success offers lessons in making that transition and proof that it can work, at least on a small scale.

Previously overseeing an electrical grid almost entirely supplied by diesel generators, the board of the Kodiak Electric Association made the decision in 2009 to go renewable by 2020 as diesel prices continued to rise.

“We wanted to get off diesel,” association CEO Darren Scott said of the utility’s diesel generators, which used to provide expensive electricity to more than 6,000 residents of Kodiak, the village of Port Lions and the largest Coast Guard base in the country. “Diesel wasn’t going to be a part of our future.”

The switch to a grid run 99.7 percent on renewable resources not only stabilized Kodiak’s electric rates but also brought them closer to the national average. After Hawaii, where the average cost of electricity is nearly 34 cents per kilowatt hour, Alaskans pay the second-highest electric rates in the Untied States, at 17.58 cents. In Kodiak, customers are now paying 13.8 cents per kilowatt hour, just above the national average of 12.5.

“It was breaking a lot of new ground in a lot of ways,” Scott said. “We were the first company or utility in Alaska to get large scale wind turbines [running].” 

Kodiak’s grid now runs mostly on hydropower, along with wind turbines. The remaining 0.3 percent comes from when the utility’s old diesel generators are turned on to make sure they still work or when they are needed as a backup source. The utility also installed an energy storage system.

The upgrades and installation of wind turbines cost the utility some $55 million, but the expensive diesel system — burning approximately 3 million gallons annually — was costing Kodiak’s residents $7 million per year. The renewable infrastructure is expected to pay for itself in savings in under a decade, and cutting the diesel generators out of the grid has reduced carbon dioxide emissions by more than 60 percent each year.

“It can be done,” Scott said. “And it actually can be done very cost effectively.”

“It was a good move,” said longtime Kodiak resident Nancy Sweeney. “It certainly has brought the electricity bill down, and we have renewable energy, which is great.”

“People have such high energy prices in places like communities in Alaska that they are happy to try solutions that can displace diesel,” said Chris Rose, the executive director of the Renewable Energy Alaska Project. “And really this is what it’s all about.”

“Every electrical system is different, but I think you can take parts and pieces to this and apply it everywhere,” Scott said. “We’ve really taken advantage of [hydropower] and used that as our cornerstone to build off of to get to 100 percent renewable.”

However, Rose said, Kodiak’s new system highlights the need for energy storage.

“There are not many places that have been able to yet employ energy storage,” he said. “But I think Kodiak has been a great influence on everybody thinking on what is possible — 99.7 percent renewable electricity is very impressive by any standard, even [internationally].”

“What we’ve seen in the last two decades is really a shift in allowing the market to function,” said Elizabeth Doris of the National Renewable Energy Laboratory. “We’re removing barriers and setting up markets to really allow people who want clean energy to access it and remove some of the risk associated with installation.”

Doris said Kodiak shows “that there is a possibility to do large-scale integration of wind. Relatively, they have a pretty small grid, and they were able to integrate renewables and reduce their prices, which is a huge message for people.”

Kodiak was able to afford the up-front costs of its transition to a renewable grid in part because of the Alaska Renewable Energy Fund, established by the state government in 2008. While other states have made similar progress, Rose said, the U.S. still lags in nationwide renewable energy development.

“In the U.S., the states have been leaders in these policies,” he said. “There is no federal energy policy like there is in countries like Denmark, Spain and Germany — and I could go on and on.”

“I think that smaller communities are really good test beds, because you have a smaller scale of the challenges you’re going to encounter,” Doris said. “I think stories like Kodiak’s are really interesting and relatable to other communities.”

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