60Hertz: Addressing Energy Poverty in Rural Alaska

Glacier in Whittier, Alaska during the summer. Photo: Isabelle Lao

In the relatively short existence of the human race, we have stood on the moon, built machines capable of synthesizing virtually anything, and even genetically modified a baby with three-parents.

At its very essence, human potential seems to be limitless. However, it is impeded when people don’t receive or can’t access energy, a fundamental right to which they are entitled.

Globally, 1.2 billion people live in energy poverty. These individuals lack access to heat, light, and any appliance that requires electricity. The United Nations has cited Affordable and Clean Energy as one of its Sustainable Development Goals (SDGs) involving all 193 of the UN’s member states. SDGs are a set of goals adopted by member states to end poverty, protect the planet, and ensure prosperity for all. Reliable and affordable energy is a necessity, yet so many are deprived of it in both developing and developed countries.

This is especially pertinent in the Arctic. Residents pay a steep price for power provided by undependable diesel generators which emit exorbitant amounts of pollution that is both harmful to local public health and global climate change, like greenhouse gases and black carbon. In fact, a typical grocery store in rural Alaska spends $17 000 on power a month, prompting higher prices for unhealthy foods with long shelf lives. Due to the remote nature and small size of many Arctic villages, it is challenging to attract investors, let alone reach economies of scale for implementing cleaner energy systems. Economies of scale are the savings made by an increased amount in production; these savings lower costs on bulk purchases, thereby drawing an increased amount of investments to the Arctic.

In the Lower 48, residents pay an average of $0.12 per kWh. By contrast, residents of rural Alaska people must pay more than five times the national average: an average of $0.65 per kWh. This increase is in large part due to the high delivery costs of diesel. These expenses greatly hamper residents’ quality of life, as it complicates or can completely impede access to various basic services including but not limited to cooking energy, clean drinking water, and heating. The struggle to access these necessities translates into generational problems. The resulting adverse effects are evident in the alarmingly high turnover rates on jobs and slew of social problems in the state.

Energy poverty, unfortunately, permeates into every facet of life. Compounded with all the nuances of the North, it results in a problem that requires true collaboration between government entities, the private sector, and the communities themselves. There are numerous approaches to take into consideration, whether from a technical or social standpoint. An argument can be made that the solution lies in combining the human dimension with emerging technology. Community engagement and input cannot be overlooked in the midst of trying to integrate modern technology into villages in rural Alaska.

60Hertz Microgrids, a start-up company based in Anchorage, Alaska, values working closely with communities to ensure they are directly addressing the given community’s needs.

Although 60Hertz is not the silver bullet, it is contributing towards a future where energy is reliable and affordable, a future many other organizations across the Arctic have endeavored to achieve. 60Hertz focuses on where their expertise lies and hands off components they are not as familiar with to other firms.

60Hertz is raising a capital stack to provide financing for an energy infrastructure overhaul with renewable energy integration in remote communities. Given that 60Hertz is not an engineering firm, they are partnering with well-established engineering companies, such as Lockheed Martin, that provide a performance guarantee. This ensures that if the system does not run as promised, the community will not be responsible for the costly repairs, an event that has happened too often in the past.

Furthermore, a scoring matrix is being developed to evaluate communities from a social, political, technological, and financial standpoint to understand their potential for an energy infrastructure overhaul. The sites being assessed range from villages to canneries to hunting lodges. With the help of a capital infrastructure fund, rural sites are able to purchase and own energy infrastructure they wouldn’t be able to afford otherwise. The aggregation of sites by 60Hertz enables economies of scales for projects, thereby lowering the price tag on costly infrastructure.

Additionally, 60Hertz is designing a software application to assist Power Plant Operators with day-to-day operations and maintenance tasks. The software is intended to prolong the tenure of these invaluable operators and reduce the wear and tear on expensive infrastructure. Many operators in rural Alaska operate a standalone utility, meaning they are held accountable for any generator failure. The software differentiates itself from other operations and maintenance apps by not understating the human element. The software is designed to support operators with troubleshooting guides and connections to other operators through a social platform where information on power plant maintenance can be shared.

However, assessing communities objectively is proving more challenging than initially anticipated. Every village is different, and solutions are never one-size-fits-all. A saying that is tossed around a lot is, “If you know one Alaskan village, you know one Alaskan village,” echoes the notion that Alaskan villages vary significantly. Attempting to score villages objectively and determine their ability to pay back a loan is nearly impossible. Not only is most of the data that is being used for analysis self-reported, but there are also many data sets missing from communities who lack reliable bookkeepers. Working closely with those developing the matrix has taught me the importance of human discernment and familiarity with the region. For example, weeks of tweaking the scoring matrix left us with a shortlist consisting of around ten communities. After a quick glance at the list, a fellow co-worker and Alaskan Native was able to point out two communities that flooded fairly severely several times a year and did not have the proper insurance for it. Installing expensive infrastructure in these places may not be ideal. This is one example of how not everything can be captured by numbers on a spreadsheet; sometimes it takes a few minutes of a critical, experienced mind to dismantle the objective view. Those who grew up in and were exposed to life in rural Alaska provide knowledge gained from decades of experience and are truly invaluable in such a project.

The ideal solution for supporting remote communities in their transition from diesel to renewable should take into account the importance of being culturally sensitive, while remaining economic and realistic. The road to ending energy poverty in remote Alaska, and perhaps elsewhere in northern regions, is long and treacherous, but, despite the risks involved, the returns are truly priceless. Investing in energy in Alaska is investing in human potential and a brighter future.

Isabelle Lao was a research intern at 60Hertz Microgrids in the summer of 2017.