Alaska Hydropower Projects Would Benefit from Reduced Federal Land-Use Fees

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Researched by Industrial Info Resources (Sugar Land, Texas)--A proposed change in federal land-use charges would benefit some hydropower projects in Alaska. The Federal Energy Regulatory Commission (FERC) is proposing a new method to calculate annual charges for hydropower projects on federal lands in Alaska.

The proposed change would reduce fees paid by most of the 21 hydroelectric projects on federal land in the state, and may prompt hydroelectric developers to move their projects forward in order to take advantage of the reduction.

Land-use charges would initially fall by 25% under the proposal.

U.S. Senator Lisa Murkowski (Republican-Alaska), the chairman of the Senate Committee on Energy and Natural Resource, welcomed the proposed change. She indicated a methodology that was put into place in 2013 has greatly increased the land-use charges. In early 2016, according to Murkowski, the current methodology resulted in a 71% increase in land use fees for hydroelectric projects on the Kenai Peninsula. It has resulted in a 679% increase during the past decade for a hydropower project near Valdez.

The Alaska Center for Energy and Power estimation for untapped hydroelectric generation is high, with the state accounting for 40% of the U.S. river-based potential and 90% of marine potential.

The state's renewable energy standard (RES) requires electric generation providers to provide 50% of their power from renewable energy sources by 2025.

Industrial Info is tracking eight active hydroelectric projects under development in the state valued at $6.2 billion, as well as 22 hydroelectric projects valued at $2.8 billion, that are currently on hold or cancelled.

Hydroelectric power is the Alaska's largest source of renewable energy, supplying 25% of the state's electrical needs. Due to the state's remoteness and size, renewable energy generation will be a major part of the future of electricity there as it moves away from carbon emitting sources.

Most of Alaska is only accessible by boat or aircraft, so communities that are currently powered by diesel generators are now looking at integrating renewable generation, such as wind, hydro, solar, biomass, micro-grid and battery energy storage, into their systems to move away from costly fossil fuels.

The Energy Power Research Institute estimates that Alaska currently has about 20.5 terawatt hours (TWh) of recoverable river energy, compared to the state's total electrical usage of 5.47 TWh.

With changes in energy policy now being pursued by state and federal representatives, Alaska is on the doorstep of capitalizing on its enormous resources.

Three hydroelectric projects that are currently in early development are the Homer Electric Association's 5-megawatt (MW) Grant Lake Hydro Power Station, Juneau Hydropower Incorporated's 20-MW Sweetheart Lake Hydro Power Station and the Alaska Energy Authority's 600-MW Susitna-Watana River Hydro Power Station.

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