Alaska’s largest planned solar farm, expected to break ground west of Anchorage this summer, is likely to deliver cheaper electricity than possible with imported natural gas, according to information the state’s largest electric utility shared with state lawmakers last month.
In a May 14 hearing of the Alaska House Labor and Commerce Committee, Chugach Electric Association government affairs manager Trish Baker said power from the project should cost about the same as power produced from natural gas at current prices.
Because gas prices are expected to rise in coming years amid a growing shortage in Cook Inlet, the solar project is poised to become cheaper than power generated by imported natural gas.
That’s only for the months when solar is an option. In the winter, during peak demand for heating and home electricity use, solar produces minimal energy in much of Alaska.
Chugach said its Beluga solar project is expected to be complete in 2027.
Solar energy costs are declining rapidly, and in parts of rural Alaska it is cheaper to operate both solar and diesel power plants than diesel plants alone, despite the cost of operating solar only seasonally. The Red Dog Mine, near Kotzebue, is planning a large solar farm.
Natural gas power is cheaper than diesel power, but the economics are driving in the same direction, said Anchorage Rep. Zack Fields during the May 14 hearing.
“The previous Cook Inlet prices, gas was cheaper. With price escalation, the lines cross and some of these small renewable projects are cheaper. That seems to be the economic environment that we’re in,” he said.
Julie Hasquet, manager of corporate communications with Chugach, said solar power costs “are expected to be comparable to thermal generation costs, resulting in essentially no meaningful impact to electric rates over the life of the project,” she said. A key benefit of the solar project is that it supports diversification in generation which reduces long-term risk and reliance on natural gas.”
She added that she doesn’t see a scenario where Chugach “could rely on all renewables for summer months without some new, major hydro coming online.”
Chugach has begun preliminary planning for four smaller hydropower projects in Southcentral Alaska.
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