Sunday, September 7, 2008

Often Overlooked Biofuel Energy Draws Attention

Having once written headlines and edited copy for a living, we admit to having a chuckle when reading the headline over a Honolulu Advertiser story today: “Future of Hawaii renewable energy projects uncertain

Leave out everything between “Future” and “uncertain” and you pretty much sum up the human condition. Or drop “ocean thermal energy conversion” into the space between those words and you reach the same conclusion.

So much is unclear about energy in this isolated state. How will renewable energy projects be integrated into the electricity grids? What will the Public Utilities Commission do to the whole regulatory picture to encourage that integration? What will the price of oil be in five years? (Many of these issues were discussed thoroughly at the Hawaii Venture Capital Association's August meeting, about which we had much to say last week.)

Hawaii Electric Light Company (HELCO) on the Big Island has legitimate concerns about accommodating three new biofuel projects. As the story notes:

“The problem is HELCO now has 265 megawatts of firm generating capacity on an island with peak power demand of only about 200 megawatts…. It isn’t clear that the utility needs the electricity from the two larger biomass projects, which together want to produce 54 megawatts of power.”

Getting Off Oil

And there’s the rub. HELCO and its sister utilities have sufficient generation capacity to meet their needs; that’s Rule #1 inside the utility industry. If they come up 1 megawatt short of meeting demand, chaos ensues.

But the vast majority of that capacity is fired by fuel oil, which is responsible for 78 percent of the electricity generation in the state. Virtually everyone agrees that has to change, but it isn’t going to happen overnight and it won’t happen without systemic change in how the utilities are regulated and compensated.

We wish the three biofuel projects good luck in working out the thorny details, and we’ll be waiting for some encouraging headlines that emphasize clarity when those deals are done.

No comments: