Perspectives on Business and Economics, Vol. 40

Perspectives on Business and Economics, Vol. 40, 2022 10 Introduction The environmental impact of climate change necessitates a transition to renewable energy that supports the development of Alaska’s renewable resources, especially within the electricity generation sector. There is also a financial incentive for both Alaskan consumers and developers. Alaskans pay more for electricity than people in the lower 48 states. The average cost of electricity in Alaska for the month of June 2021 was $0.207/kWh compared to the US average for the same month of $0.113/ kWh (US Energy Information Administration, 2021). Renewables offer a potential solution for Alaskan consumers in response to this cost disparity. Although total electrical demand is small due to the modest population, there is opportunity to increase demand and thereby justify development costs. Rather than developing renewable energy solely for existing residential and commercial use, which may be financially unjustifiable, a developer could simultaneously create a profitable application for large-scale energy utilization alongside a new generation facility, one that would eliminate the need for costly transmission. Such an approach would be a financial incentive for developers, while supporting development of Alaska’s renewable energy resources. Alaska is uniquely positioned in the US, with multiple, abundant sources for renewable energy, most of which remain underutilized, if not untapped. These renewable energy resources include geothermal, wind, tidal, solar, and hydroelectric power. Although they are plentiful, access to each may be restricted geographically or based on time of day and season of the year. Tidal power is harnessed near the ocean, restricting its availability. Similarly, hydropower, which already constitutes 30% of the state’s energy portfolio, must be located near bodies of water that can provide a steady flow year-round (WINDExchange, 2021). Geothermal and wind energy in amounts sufficient to produce electricity also exists only in certain areas of the state. Solar energy is not as restricted geographically; ALASKA’S RENEWABLE ENERGY POTENTIAL: OVERCOMING CHALLENGES Jessica A. Franolic Alaska has great potential for private and public development of renewable energy; the most promising resources are geothermal, wind, tidal, and solar. Three clear applications are transmission to the Railbelt grid, on-site use of high-energy production, and onsite use of low-energy production in remote communities. Alaska’s most significant obstacles to development are land ownership and remoteness. With research and planning, overcoming these challenges becomes an achievable step toward resource development.