HAWAII’S RENEWABLE ENERGY MANDATES, and HOW IT AFFECTS EVERYONE

from conforhawaii.com FEBRUARY, 2011

Hawaii Tribune-Herald: Officials: Geothermal is the future

We were honored to be addressed by two distinguished speakers at our Feb 27 forum: Michael Kaleikini, manager of Puna Geothermal Ventures, on “Geothermal Energy in Hawaii" and Dr. Panos Prevedouros, Professor of Civil Engineering at University of Hawaii, on “Statewide Implications of the Mandates". Questions were entertained after both speakers concluded.

Mr. Kaleikini described the history and present role of Puna Geothermal Ventures production on the Big Island. The first geothermal wells were drilled in the 1960s in Kapoho. In 1981, the state had a pilot program to prove the viability of geothermal energy production. The plant produced 3 MW of power, and was designed to last 3 years but stayed in production for 6-7 years. In 1993 PGV came on line, the first commercial geothermal plant in Hawaii. It was located on the lower rift zone of Kilauea because “ that is where the resource is."

It uses a hybrid / combined cycle where steam and hot water (brine) comes up in production wells from about 6000 ft down, is used to drive turbines for power generation, and then is returned underground via injection wells. It is a 100% renewable and closed-loop system. Today there are 6 production wells and 4 injection wells in operation. 

PGV has 34 full-time employees and contractors.  The State of Hawaii owns the mineral rights, and PGV pays royalties to the state and county. Proceeds from those royalties have gone to support the Hele-on bus, lifeguards, park maintenance and other public projects. PGV is owned by ORMAT Corporation, head quartered in Nevada, with geothermal projects located around the globe. They are the only vertically integrated geothermal energy company, involved with drilling, manufacturing of turbines and associated specialized geothermal equipment and electrical power production.

Currently PGV is under contract with HELCO to provide 30MW of electricity, and is permitted to go to 60 MW. They provided 17% of the Big Island total electricity last year, and they just recently signed a new contract to provide an additional 8MW at a fixed price not tied to the price of oil (as their present contract is).

Dr Prevedouros then addressed us.

He pointed out that Hawaii had the most expensive electricity in the nation, double that of California and 3 times the national average (36 cent per kw-hour on the Big Island). Our energy sources as a state are 77% from oil, 15% coal and the rest “renewable".  The Big Island is about 68% oil and 32% renewable, of which geothermal is about 18% and wind 11%. The state is therefore vulnerable to the availability of oil.  American national policy has supposedly been to reduce our need for oil as an energy source, but through many different administrations little progress has been made. As Jon Stewart has said about this, "Fool me once shame on you. Fool me twice shame on me. Fool me 8 times...am I a @#$% idiot?"

Hawaii has had "renewable energy" mandates since 2001. In 2008, the Lingle administration increased the goal to be 70% "clean" energy by 2030, of which 40% is to be in electrical production and 30% from efficiencies and alternate fuel sources. However, if we kept present oil and coal usage constant, and massively increased production of biomass, H-power (trash), geothermal, wind and solar, we would still not meet the projected demand in 2025.

Part of the problem is how does one define "clean"? Is it energy that reduces greenhouse gases, hazardous chemicals (like mercury and sulfur dioxide), environmental degradation associated from production (like mine tailings and drilling leaks or cutting forests to plow more fields for biofuels), or the pollution hazards of combustion (such as trash)?

In addition, it is true that cheap energy = growth, and this is essential for our economic system. Most of our economic growth is tied to natural resource extraction, which will be limited if resources are not renewable. However, that does not apply to renewable sources of energy, including geothermal, hydro, solar, trash burning, nuclear and potentially algae to fuel.

What is needed is a realistic approach, not pipe dreams", Dr. Prevedouros stated.

Dr. Prevedouros stated "Energy policy should be grounded in realism, and should pursue the ‘Double A's’: Abundant and Affordable."

Energy policy in the US has consisted of fantasies: fantastical claims of imminent energy independence or imminent technology breakthroughs. Wind and solar power are unreliable for baseload electricity; even with subsidies, they do not scale up enough to reduce fossil fuel use significantly.

Governments simultaneously spend too little and too much on clean-tech. Too little on research, development and demonstration of new technologies, and too much subsidizing the commercialization of older technologies that don’t stand on their own. If clean-tech companies can make a profit making subsidized technologies, why would they try to invent anything better? 

So what makes sense for Hawaii?

Clarity of goals is needed.

ENERGY goals pertain to total energy management for electricity and transportation, local and long-distance.

POWER goals pertain to the management of electricity generation and consumption.

Hawaii’s priorities should be on ENERGY. Clean POWER cannot bring food, supplies and visitors.

He quoted from former state senator and chemist Pat Takahasi's 2007 book "Simple Solutions for Planet Earth”: Don't use biofuels for electricity production. "Don't! It's a waste! Use liquid biofuels for transportation only"." 

On the Big Island, increase geothermal for complete electrical supply. He notes the geothermal reserve on Earth is 70 million QUADs (hot rock only) but the USA needs only 100 QUAD/yr. In the Philippines they already use 27% geothermal, and in Iceland 100% for electrical power.

On Oahu and Maui, increase trash burning and clean coal as electrical power sources. Australia has a resource of over 75 billion tons of high quality and inexpensive coal: low in sulfur and reduced ash, high in energy content. India recently contracted to purchase 8 billion tons and was building port facilities for that alone. Honolulu should consider that as an alternative to oil. 

On Oahu, increased "green bin" biomass use for methanol vehicle fuel, cooking grease for biodiesel, and long-term use of biofuels from algae. Algae have the potential of being both renewable, greater affordable energy potential than wind or solar, and are attracting serious investment.

Also not out of consideration would be nuclear.  The Nuclear Regulatory Commission is processing permit applications for at least 26 new power plants in U.S.  Gallop Poll shows 62% favor the technology, and Obama wants to triple the amount of loan guarantees for new reactors. The current price tag for a large nuclear plant: $6-8 billion. Traditional nuclear power plants are not suitable for Hawaii. However, there is the possibility of extending lengthy power cables to decommissioned Navy vessel with small reactors (50 MW). Also promising are the "micro-reactors" such as the Toshiba 4S (Super Safe, Small and Simple) nuclear power system able to supply 10 MW of electricity for 30 years without any new fuel. The plant is simply buried and then dug up and replaced when used up. 

The achievable goal would be to bring Hawaii’s overall present 75% oil usage down to 40% by 2040, and with this approach it is doable.

Questions from the audience:

"Why is it a good thing for HECO to announce with pride recently that they can run a generator on 100% palm oil, when it costs twice as much as oil and is only 90% as efficient?"

Dr. Prevedouros replied that it was NOT a good thing, that palm oil was not a practical source for Hawaii. Such approaches of using biofuels for electrical production would destroy food sources, and the politicians were not properly focused.

"Why wasn't there more geothermal production on the Big Island?" An audience member volunteered that it was because it was not the State's resource but it belonged to the Hawaiian Kingdom, and was being stolen by the occupying entity since an event in 1893.  But Mr. Kaleikini noted that HELCO would not authorize much more than present, as the grid was already potentially supplied with 30% excess electrical generation capacity. 

"Why is the government so in the way in Hawaii? In Asia, private companies are taking the risks and the lead". Dr Prevedouros agreed that the government needed to get out of the way and let the private sector more access. He related an example of the State's inefficiencies: a massive air-conditioning unit at the University chilled the air to a frigid 60deg, then used heaters to bring the temperature up to a comfortable level. "Ridiculous!"

One audience person raised several questions about the technical compliance of the PGV with present regulations, including possible contamination of the water table, and emissions that he claimed should have required the complete evacuation of Pahoa Town recently.  Mr. Kaleikini replied that PGV was well supervised by several agencies and in compliance with all requirements, and he would be happy to go over all these technical issues including a "worst case scenario" plan with her and her group.

"Why is it that if oil has a production cost here of about 8-10cent/kw-hr, and geothermal can break even at 12 cent/kw-hr, and PGV is contracting now at 16cent/kw-hr, why has HELCO signed a contract for 20 yrs with a biofuels plant in Ka'u that is yet to be built for $310 million on 13,000 of leased land, has yet to produce an ounce of fuel, and is going to raise our electrical rates?"

Dr Prevedouros replied that it generaly only makes sense to introduce alternative power sources as he described before, that they must be near-term affordable but may incrementally cost more so that we could save money in the long term. "At some price of oil, it can all be worth it."

Mr. Kaleikini added that although they charged 16cent/kw-hr for their geothermal, we paid 36cent/kw-hr due to the costs of distribution on the grid. There were only 80,000 customers for a grid that covered an area much larger than Honolulu, where there are nearly 300,000 customers, which was why Oahu only paid 26cent/kw-hr.

Questions concluded so that Dr Prevedouros could catch his plane home.

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Dr. Prevedouros's slides are viewable here: http://www.eng.hawaii.edu/~panos/Hawaii%20ENERGY_pdp.pdf