Modernizing Alaska’s Railbelt grid with lessons from Iceland

October 23, 2023

Iceland’s Landsnet transmission network
Iceland’s Landsnet transmission network, totaling approximately 2000 miles including 570 miles of 220/230 kV lines, 800 miles of 132/138 kV lines, 600 miles of 66/69 kV lines and 25 miles of 62 kV lines connecting the small community of Húsavík.

The Governor of Alaska recently charged the Alaska Energy Security Task Force with developing strategies or pathways for achieving 10 cent/kWh power across the state. Currently, the delivered cost of power on the Railbelt averages 22 cents/kWh. It is clear that, with the additional uncertainties around Cook Inlet gas supply, Alaska’s business-as-usual practices are not adequate.

A new white paper prepared by ACEP researchers Gwen Holdmann and Erlingur Gudleifsson delves into the elements that shaped Iceland's present energy landscape, its current market dynamics and the insights Alaska can glean from Iceland’s experiences as it navigates its own energy transition.

As Alaska looks toward transitioning the Railbelt grid to delivering increasingly renewably generated power and at a lower price, transforming how we generate and use power relies on modernizing the grid infrastructure. This includes not only physical infrastructure, but the governance, ownership and cost recovery methods.

Looking to energy economies that have successfully transitioned from a carbon-heavy power generation fuel to near 100% renewables can offer insights to help make this change. Iceland in particular can serve as an instructive model for Alaska due to similar installed capacity, grid length, population served and environmental conditions.

Today, Iceland's energy market exemplifies what Alaska aspires to develop. The average price of delivered power in Iceland stands at less than 10 cents/kWh. Iceland's Ring Grid, managed by a state-owned Transmission System Operator, operates under the principles of open access, transparent pricing and non-discriminatory transmission.

Successfully modernizing Alaska’s Railbelt grid benefits residential consumers but is also key to Alaska’s ability to be competitive in a changing global economy that is increasingly reliant on accessible, affordable and low-carbon energy sources.

Read the white paper, “Lessons Learned from Iceland’s Ring Grid: Ownership and Asset Management Strategies for an Islanded Grid” and watch a presentation by Gwen Holdmann here.