FAQs

A Power Purchase Agreement (PPA) is a contract between a utility company and an Independent Power Producer (IPP), like Alaska Renewables (us) or Aurora Energy (a local coal power plant owner operating in downtown Fairbanks). PPAs are a crucial part of providing utility customers, like members of a rural electric cooperative (you and me), certainty on the cost, environmental impact, and reliability of the power plants keeping the grid running.

Here’s what a PPA generally includes:

Buyer and Seller: In this case, it would be between an Alaskan rural electric cooperative and Alaska Renewables. It wouldn’t make sense to develop a large-scale wind farm if the energy produced wasn’t put to use!

Quantity and Duration: The PPA specifies how much electricity the IPP will provide and how long. This is usually a fixed quantity of electricity and spans years to decades. GVEA’s Request for Proposals for Wind Energy requested a 20- to 30-year term.

Pricing: The agreement outlines the exact price, which eventually must be approved by the Regulatory Commission of Alaska; this price can be fixed or variable and can be flat or escalate over time.

Delivery and Performance: The PPA also defines how and when the electricity will be delivered. This generally includes performance guarantees (proper maintenance, servicing, etc.) and assurance that delivery will be to operational standards—this is a big part of providing a reliable and sustainable energy source! If the project doesn’t work, the project owner doesn’t get paid, so this puts absolute discipline on the project development team to ensure the project operates smoothly for the full length of the asset (i.e. 30 years for a wind farm).

Because Alaska’s grid is isolated, a PPA allows IPPs to bring their expertise, values, high operating standards, and investment dollars to the State. Alaskans reap the benefits of this through lower electricity costs, reduced air pollution, local economic stimulation, new employment opportunities, and community benefits.

While wind turbines do have the potential to contribute to bird mortality, wind energy production is far less lethal than the fossil fuel-derived energy sources they replace. A study of operating projects in the U.S. and Europe found that fossil-fuel-based power generation resulted in over 19 times more bird fatalities than wind energy per unit of energy produced (Sovacool, 2013).

To place the impact of wind turbines in the broader context of other drivers of bird mortality, wind turbines have many orders of magnitude smaller impacts than other human causes:

Cause-specific annual mortality in the United States varies from billions (cat predation) to hundreds of millions (building and automobile collisions), tens of millions (power line collisions), millions (power line electrocutions, communication tower collisions), and hundreds of thousands (wind turbine collisions) (Loss et al., 2015).

Moreover, the transition to renewable energy is a critical step in reducing the threat climate change is already having on bird populations. Scientists from Audubon published a 2020 paper: finding:

If climate change proceeds on its current trajectory, arctic birds, waterbirds, and boreal and western forest birds will be highly vulnerable to climate change, groups that are currently not considered to be of high conservation concern. There is an urgent need for both (a) policies to mitigate emissions and (b) prioritization to identify where to focus adaptation actions to protect birds in a changing climate.

Nonetheless, Alaska Renewables takes a science-based, data-driven approach to understanding and mitigating the impacts of the proposed Shovel Creek Wind Energy Project on birds (and bats). As part of the ongoing environmental permitting process, our independent consultants continue to conduct field studies on bird use in the project area using both expert observers and remote sensing technology. This data will be analyzed and submitted as part of the permitting process and used to identify mitigation measures that can help ensure the direct impacts of the project on birds are reduced to the extent possible, all while realizing the maximum benefits to birds through the transition to wind energy, a lower-impact energy source relative to our conventional energy supply. 

While it is true that the project will cost hundreds of millions of dollars, that upfront cost will not be borne by the Golden Valley Electric Association (GVEA), its membership, or our local community.  The upfront cost of building the wind farm will be paid for by conventional bank financing from the independent power producer that will own and operate the wind project. While this cost seems staggering, it can be put in the context of other power plants: the 2018 UAF coal power plant (17 MW) cost $245 million (DeMarban, 2017), and the Fort Wainwright plant (22 MW) replacement was estimated at $687 million (Ellis, 2020). Just like any large investment one might make in one’s personal life (house renovation, new car), the investors are making a long-term commitment to the interior; bringing this capital in the form of the Shovel Creek project is a major vote of confidence by them and ourselves as a community in the importance of low-cost electricity for future generations.

Costs must be considered with a cost-benefit analysis. The wind project is expected to produce more than half a billion kilowatt-hours per year. This energy would be sold to GVEA through a long-term, fixed-cost power purchase agreement at a contracted price below what GVEA would otherwise pay for fuel and purchased power, where GVEA only pays for what the project produces. As a result, GVEA members would benefit from a reduction in the cost of energy, all without the upfront costs and risks that would otherwise be borne by the utility and its members.

No waste will be disposed of at the project site. Existing municipal waste facilities will be utilized for any waste produced during the construction, operation, and decommissioning of the facility.

Currently, the average wind turbine is 85% recyclable, and this percentage is increasing as new technologies and materials are developed and deployed. Modern wind turbines can be expected to operate for 30 years. As many components of wind energy projects are durable and can last well beyond this 30-year period (e.g., roads, electrical infrastructure, and wind turbine foundations and towers), the useful life of these projects can be extended by reusing this infrastructure and “repowering” the project with new turbine generators and blades atop the existing tower structures. At the end of a turbine’s life cycle, components that are unable to be reused in a repowering of the project could be repurposed, recycled, or as a last resort,  disposed of in existing municipal waste facilities.

Modern wind turbines are meticulously engineered with enclosed components and adhere to  stringent safety standards, resulting in an extremely low likelihood of direct fire initiation. Indeed,  early versions of the technology had design flaws that can be easily found in internet videos, without reference to whether it was the first turbine or the 300,000th turbine. Nowadays, with renewables comprising the vast majority of what the world is installing for power generation, the design has massively improved, as is typical with technology maturation curves. 

Alaska Renewables studies the practical risks associated with indirect factors such as electrical malfunctions or maintenance activities and is leveraging the industry’s experience with rigorous safety protocols and ongoing technological advancements to effectively mitigate potential hazards. 

Wildfire is a natural process in Alaska, and more acres are burning as the climate warms.  Earlier snowmelt, later winters, higher temperatures, and more frequent lighting strikes are all contributors to the increase in wildfires. Although wind turbine-caused fires are exceedingly rare, it is possible or even likely that wildfires may affect the project area during the project’s 30+ years of operation, given the natural cycle of fires that occur throughout Interior Alaska. In fact,  the northern section of the project recently burned in the lightning-caused 2019 Shovel Creek wildfire. The wind turbine access roads that would be built along some of the ridgelines in this area will offer enhanced firefighting access to these forested lands, as well as creating a limited firebreak throughout the project area.

The Alaska Renewables team’s biographical information is available on the company’s website.  We draw from our backgrounds in engineering, earth and environmental sciences, and social work. Our team is heavily augmented by the expertise and experience of a diverse team of experts, engineers, lawyers, consultants, advisors, and by extension, the local communities that we serve. 

At the same time, we practice humility, kindness, and curiosity. While it may concern some community members that not every question has been answered yet, we deeply value the transparency of admitting and accepting the unknowns while committing to work for the answers. Indeed, we believe this is the only way for our species to learn and advance. 

As the project development continues to advance, we will continue to grow that team with individuals and organizations with successful industry track records that can be entrusted with the successful development, financing, construction, and operation of the project. 

We welcome you to join us.

Alaska Renewables does not have the expertise to have an in-depth view of federal fiscal policy. We are responding to the need of Alaskans for low-cost, long-term energy security. The availability of government funds for coal, oil, gas, and renewables has come and gone over the years, in approximately even cumulative shares (Dinan, 2017). The relevance of low-cost, long-term energy security has not varied and remains ever more important as geopolitical, climate, and socioeconomic issues challenge our society.

Grid operators and economists care about several criteria: cost, availability, capacity factor, reliability, and others. Each technology must be evaluated according to the facts of its performance.

Modern wind power plants are typically online and available >98% of the time, producing energy when wind is available. Often this availability is in the contract between the wind farm owner/operator and the utility. Wind performs with higher availability than coal power plants. For example, even in the well-maintained power fleet of the mid-Atlantic, the forced outage rates for all major traditional power plants are much greater than wind’s.

The grid has long been designed to deal with variation in consumer load—GVEA doesn’t know when a user turns on their toaster oven but has learned to deal with it nonetheless—and so too, over the last few decades, most utilities around the world have learned to deal with variations in generation. Hawaii (Spector, 2023), Ireland (reNews, 2022), South Australia (Parkinson, 2023), and other islanded grids are regularly seeing more than 75% of their power coming from renewables and have adapted without compromising reliability and often improving it. Villages across Alaska have been pioneers over the past two decades in the same, with wind, solar, and diesel operating harmoniously, now bolstered by battery energy storage. GVEA and its technical partners have the technical ingenuity to make this transition.

The capacity factor is frequently a confusing measure of value. The wind resource at Shovel Creek Wind will support a capacity factor of approximately 40%, meaning that over the course of an entire year, the project will produce an average of 40% of its maximum rated output. This does not mean that the project will only produce power 40% of the time.

In fact, our meteorological measurements and wind energy production modeling indicate that the site will be providing meaningful amounts of power to the grid more than 80% of the time. The capacity factor is a great measure of how good the wind is, but it’s not a measure of whether the project is reliable or not. For comparison, in 2022, the average American coal power plant had a 48.4% capacity factor (US Energy Information Administration, 2023).