$200 million federal grant supports major Railbelt electric grid upgrade project, enabling more renewable energy

The Alaska Energy Agency has accepted a massive federal grant to build a power line across Cook Inlet. Once built, the line will allow more renewable energy to be transmitted from the Kenai Peninsula to the Railbelt grid.

The Alaska Energy Authority board this week voted to accept a $206.5 million grant from the Department of Energy to fund the project. The authority must find matching funds to support the grant.

The total amount of $413 million will fund construction of a 38-mile undersea cable across Cook Inlet, from Nikiski to Beluga, said Curtis Thayer, executive director of the Alaska Energy Authority.

The transmission line will provide redundancy to existing power lines running alongside the overhead towers, he said. It will increase transmission capacity by four times, he said.

This will allow more power to be fed into the grid from the Bradley Lake Hydroelectric Project near Homer, as well as from future renewable energy projects on the Kenai Peninsula.

He added that the transmission line must be completed within eight years.

He added that it is likely to be the largest construction project planned in Alaska, outside the multibillion-dollar oil fields currently under construction on the North Slope.

The federal grant is part of a bipartisan infrastructure bill passed by Congress in 2021 and signed by President Joe Biden.

He added that the energy office has eight years to secure financing.

In the first step, nearly $33 million in matching funding was identified, Thayer said. The agency and utilities have pledged $20 million in bond authorization, and the state has provided $12.7 million, he said.

He added that efforts are underway to obtain additional financing and talks are underway with parliament and utility companies on this matter.

He added that the Alaska grant was the fifth-largest of its kind in the country, out of 700 applications submitted nationwide.

“We all recognize that we need these improvements,” he said. “When the federal government pays half of that, it makes a huge difference.”

The line will bring many benefits once it’s built, said Chris Rose, executive director of the Renewable Energy Alaska Project. As part of that effort, lawmakers should ensure that utilities from Homer to Fairbanks use a unified operating system to transmit power as efficiently as possible along the entire Railbelt, he said.

Thayer said the high-voltage direct current transmission line will allow more renewable energy to be distributed from the Bradley Lake project to the Railbelt system.

The Bradley Lake project already provides 10% of the power on the Railbelt from the Kenai Peninsula to Fairbanks, he said. It’s the cheapest electricity on the grid.

However, existing lines have relatively limited capacity, which limits the amount of power that can be transmitted from Bradley Lake, he added.

The planned transmission line will also support future renewable energy projects on the Kenai Peninsula, such as the planned construction of a large solar project.

“If you look at Bradley, and you look at solar, and even wind, it gives us more options,” Thayer said of the project. “Because right now we can’t send more power north on those transmission lines to south-central Alaska or Fairbanks because we’re limited by size, even though right now the hydro plant can produce more power.”