The forecasts generated as a part of this study included projections for the existing load base, EVs, BTM PV, and heat pumps. Local and global trends were used to project growth rates and generate an estimate for the amount of load through 2050.
Two load forecasts were generated to represent two trajectories for the adoption of electrification and residential solar generation. These forecasts are called the moderate and aggressive forecasts. The moderate forecast was determined by following current adoption of technologies and forecasts generated by other Alaskan entities. The aggressive forecast was set to assume 90% of buildings (residential and commercial) adopt heat pumps and residential solar, and 90% of vehicles are electric vehicles in 2050. Therefore the aggressive forecast provides a comparison of current trends and near total adoption of these technologies. The inputs, assumptions, and methods used to generate these forecasts are outlined below along with the resulting projections.
3.1. Electric Vehicles
Number of Electric Vehicles
The Alaska Energy Authority (AEA) produced two EV growth forecasts through 2026, continued and aggressive, for the state of Alaska as part of their Electrical Vehicle Infrastructure Implementation Plan [
5]. The forecasts were scaled from all of Alaska to just the Railbelt by assuming 76% of vehicles in the AEA Alaska forecasts were on the Railbelt, which was based on the number of registered vehicles in the state versus in communities along the Railbelt. The historical growth rates for electric vehicles in Anchorage were obtained from CEA’s electric vehicle information [
12]. The AEA forecasts and the historical numbers of EVs on the Railbelt can be seen in
Figure 3.
The AEA forecasts were then extended to 2050 based on an assumed continuation of 2nd degree polynomial growth. The moderate forecast of EV adoption in this study is assumed to be the result of the extended AEA aggressive forecast. In 2050, the number of EVs on the Railbelt for the moderate forecast is 353,381 which equates to 71% of vehicles based on 2022 Alaska DMV number of registered vehicles in the Railbelt. The aggressive forecast for this study assumes 90% of vehicles will be EVs, which equates to 449,000 vehicles. These forecasts are illustrated in
Figure 4.
To compare these EV adoption forecasts to other regional, national, and global forecasts, the number of EVs used in
Figure 5 was converted to the percent of vehicles in the Railbelt in
Figure 5. The Bloomberg Electric Vehicle Outlook for Electric Vehicles [
13] for leading markets is shown as comparison, as the United States is considered a leading market. The ISO-NE EV forecasts [
7] are shown as a comparison to another cold region in the United States, as EV performance degrades in cold weather. Additionally, the national EV adoption forecasts from [
14] is also illustrated in
Figure 5.
The Railbelt EV adoption forecast is slightly lower than ISO-NE, the United States, and global leading market adoption forecasts as seen in
Figure 5. The Railbelt adoption rate in 2030 is approximately 10% compared to 15-25% adoption for the other regions. This lower adoption rate is reasonable and is expected for the Railbelt in Alaska due to the increased energy use both while parked and while driving in cold-climate as outlined in [
15].
3.2. Behind-the-Meter Solar
The primary constraints for solar PV adoption in Alaska are the lack of state incentives and a renewable portfolio standard (RPS), and the ITC’s effective years. Alaska currently has no RPS, although an Alaskan senate bill had been introduced to enforce one but it was not passed in the 2023 state legislative session. BTM solar incentives available to Alaska include the federal solar ITC and local solarize programs where discounts are available for community-wide solar installations. The ITC provides a 30% discount for solar PV installation between 2022 and 2032, decreasing to 26% in 2033, and 22% in 2034 [
16]. Despite the lack of state incentives or mandates for clean energy generation, the Railbelt has experienced exponential growth of the BTM capacity of BTM solar PV, which is illustrated in
Figure 6 [
17].
The BTM solar forecast generated in this work used several factors to determine growth rates, including:
The Energy Information Administration’s (EIA) energy outlook predicts national electricity rates to increase linearly beginning around 2027 [
18]. The National Renewable Energy Laboratory’s (NREL) Annual Technology Baseline (ATB) for residential and commercial PV costs (levelized cost of energy (LCOE), operations and maintanence (O&M), capital expenditures (CAPEX)) shows decreasing costs for both the moderate and advanced scenarios until 2030, then decreases at a lower rate after 2030 [
19]. These electricity and solar costs forecasts are illustrated in
Figure 7.
The historical Railbelt BTM solar capacity was compared to other BTM solar forecasts across the United States including the states within ISO-NE’s territory (Maine, Massachusetts, Vermont, New Hampshire, Connecticut, and Rhode Island) [
20], representing a cold region and Hawai’i [
21], representing a region with very high BTM solar installations rates. The Hawai’i installed capacity is from the Hawaiian Electric, Hawai’i Electric Light, and Maui Electric covering the islands of Maui, Lana‘i, and Moloka‘i. For equal comparison between regions, the installed capacity forecasts are normalized by the 2013 amount of installed BTM solar capacity.
Figure 8.
Historical Behind-the-Meter solar installations in the Railbelt, in ISO-NE, and Hawai’i normalized by 2013 installed capacity by region [
20,
21].
Figure 8.
Historical Behind-the-Meter solar installations in the Railbelt, in ISO-NE, and Hawai’i normalized by 2013 installed capacity by region [
20,
21].
For perspective, the historical BTM solar installed capacity as a percentage of peak load is 0.5% in ISO-NE (2022 net peak load in ISO-NE was 24,780 MW [
22]), 74.7% in Hawai’i (2020 net peak load in HECO was 1,496 MW: Hawai’i was 183 MW [
23], O‘ahu was 1,116 MW [
24], Moloka‘i was 5.8 MW, Lana‘i was 6.14 MW, Maui was 185.3 MW [
25]), and 1.5% in the Railbelt (2021 net peak load in Railbelt was 765.3 MW). Note that the Hawai’i and ISO-NE are summer peaking systems, and therefore, BTM solar will impact the peak load in those regions. In the Railbelt, the peak load occurs in winter, and therefore, BTM solar will have the most impact during the lowest load period in the summer, which was 381 MW in 2021. Therefore, the 2021 Railbelt BTM solar capacity as a percentage of the minimum summer load is 4.8%. A better comparison of BTM solar impact to the system would be a energy generation comparision. However, that information was unavailable. ISO-NE and Hawai’i will have a greater amount of energy generation per installed capacity due to high capacity factors in those regions with lower latitudes compared to the Railbelt. Therefore, even though the percentage of BTM solar by installed capacity to peak load and minimum load is larger in the Railbelt compared to ISO-NE, ISO-NE will experience a greater impact from BTM solar in terms of total energy generation.
A significant finding is that the Railbelt in Alaska is experiencing a similar growth rate (not total amount) in BTM solar to ISO-NE compared to peak load and as normalized by 2013 installed capacity. This growth rate is similar despite lower capacity factors in the Railbelt and a lack of state incentives for BTM solar in Alaska. The growth rate as normalized by 2013 installed capacity amounts in Hawai’i is lower compared to ISO-NE and the Railbelt. Hawai’i’s lower growth rate is likely due to reaching hosting capacity limits of the distribution and transmission system in Hawai’i due to high percentage as compared to peak load (74.7%). Therefore, it is reasonable to expect continued BTM solar growth rates in the Railbelt similar to those which are currently seen.
This work predicts continued exponential growth based on the number of installations or number of buildings with solar, based on the exponential growth shown in
Figure 6, until 2027 which is halfway through the duration of the ITC which ends in 2032.
After the four year period of exponential growth from 2023 through 2027, it is assumed that solar installations will continue to increase linearly. The linear growth rate was based on the rate of change from 2025 to 2027, which equates to approximately 3,318 customers per year. This rate of change was applied from 2028 to 2033, a year after the 30% ITC discount ends. This is to reflect possible construction delays.
From 2034 to 2040, estimated electric costs are increasing, estimated solar installation costs have a small rate of decline, and the ITC discount is decreased to 26% and 22% for systems installed by 2033 and 2034, respectively. Therefore for this time period, it was assumed that installations will continue to increase, but at half of the previous rate, about 1,659 customers per year.
It is expected that the percentage of households that can afford to install solar PV that haven’t already done so will also decrease over time, which is predicted to negatively impact solar adoption in the absence of solar incentive programs for low and middle income households. For the period from 2040 through 2050 the growth rate is halved again to 829 customers per year to reflect this impact. By the end of 2050, the projected number of residential and commercial buildings with solar is 53,386. Given that the number of residential and commercial buildings in the Railbelt is 292,035 this means that 18% of residential and commercial buildings in the Railbelt will have installed BTM solar according to this forecast.
Using the current typical BTM solar installation size of 5 kW per install, the installed BTM solar capacity is calculated. The BTM solar forecast by number of installations and by capacity is shown in
Figure 9. For comparison, the Solar Energy Industries Association’s (SEIA) five year growth projection for Alaska was also included in
Figure 9 at a total of 69 MW by 2027. This is very similar to the introduced Railbelt BTM solar forecast.
The aggressive solar forecast introduced in this study assumes a 90% of residential and commercial buildings will install BTM solar by 2050. This equates to 262,832 houses, and a total installed capacity of 1,314 MW based on a 5 kW typical installation size per building.
3.3. Heat Pumps
The heat pump adoption rate assumes a new installation of a heat pump. This does not assume the full replacement of heating systems, since, for most of the Railbelt, temperatures routinely fall below the efficient operating range of heat pumps when a back up heat source would be necessary. The purpose of this heat pump adoption forecast is to predict the impact heat pump installations would have to load and not to transition all heating sources to electricity.
CEA generated a heat pump forecast for the CEA service territory [
26]. This heat pump forecast was expanded to include all of the Railbelt and extrapolated to 2050. The CEA moderate and aggressive forecasts were continued at the same growth rate from the original forecast of 2032 out to the target of 2050 for this study. The forecast was also increased by 97% to expand to the entire Railbelt at an equal rate of adoption. The forecasts are shown in terms of number of installations and by the installed capacity assuming a 3.2 kW rating per heat pump. The CEA moderate and aggressive based forecasts are illustrated in
Figure 10.
The ISO-NE’s 2022 Heating Electrification Forecast was use to provide comparison to the Railbelt heat pump forecasts as extrapolated from CEA’s forecasts. The forecasts were normalized by the 2022 number of installations to provide more equal comparison of the forecasted growth rates. These normalized heat pump growth forecasts are shown in
Figure 11.
The heat pump forecasts for 2023 from ISO-NE and from CEA are also compared by percent of total occupied housing. The 2023 ISO-NE heat electrification forecasts estimates 63,700 heat pump installations in 2023, out of approximately 6 million occupied housing units, equates to 2.2% of households. The CEA moderate and aggressive forecast estimates 200 and 250 installed heat pumps respectively for the moderate and aggressive forecast in 2023 in CEA’s territory. This extrapolates to 400 and 500 installed heat pumps for the moderate and aggressive forecasts for the Railbelt, which equates to 0.2% and 0.25% of occupied housing units. In comparison to ISO-NE, the number of heat pumps forecasted to be installed in the Railbelt in 2023 is 10 times less than ISO-NE. Therefore, ISO-NE is much farther along in adoption of heat pumps than the Railbelt, and it is feasible that adoption of heat pumps in the Railbelt may exceed that in ISO-NE on a per household basis due to its low 2023 forecasted adoption rate.
ISO-NE is primarily heated with natural gas [
27], which has a price of
$16.60/MMBtu [
28]. In the Railbelt, the central region is primarily heated by natural gas as well but at a slightly lower price of
$14.46/MMBtu. The northern and southern regions have a greater mix of heat energy sources, including #1 heating oil with a current price of
$29.84/MMBtu. In the Fairbanks North Star borough in the northern load region where heating oil is common, U.S. Environmental Protection Agency’s air quality standards are in violation. As a result of those violations proposed actions include the use of ultra-low sulfur diesel to replace use of heating oil and additional measures to reduce PM
and SO
emissions from coal power plants [
29]. Both of these proposed measures would increase the cost of residential heating and electricity, which will impact the value of heat pumps in the region.
Additionally, affordable natural gas availability in Alaska is uncertain according to statements from the operator of the Cook Inlet natural gas wells, Hilcorp [
30]. Since natural gas is the primary fuel used to generate electricity on the Railbelt, an increase in the price of natural gas resulting from a reduced supply will impact the price of electricity, which is used to operate a heat pump. Regional variation in climate, electricity prices, heating fuel prices, and heating fuel availability will play a role in the adoption rate of heat pumps. Heat pumps provide an additional value beyond heating in New England as they can also provide air conditioning whose need in this region has increased over the years. In comparison, there less but not negligible need for air conditioning in the Railbelt.
Taking into account the tradeoffs between the cost of heating fuels, value of air conditioning, normalized forecasts, percent adoption of heat pumps comparison, and affordable natural gas availability risk in the Railbelt, it is estimated that the Railbelt will have a higher adoption rate than ISO-NE. Therefore, the aggressive heat pump forecast proposed in this study follows the extrapolated CEA moderate forecast. This equates to 41,916 heat pump installations in commercial and residential buildings by 2050, which is 14.4% of all commercial and residential buildings. This would result in a potential maximum additional load of 160 MW from heat pumps, though it is unlikely that all heat pumps would be consuming electricity at the same time. It is noted that this forecast will change and should be updated in the event of unavailability of affordable natural gas.
The aggressive heat pump forecast introduced in this study assumes that 90% of residential and commercial buildings will install a heat pump by 2050. This equates to 262,832 houses, and a potential maximum additional load of 841 MW based on a 3.2 kW typical installation size per building.