OTEC Likely To Have Its Moment in ‘Big Wind’ Hearings

Public meetings important to Hawaii’s energy future will be held this week in Maui and Honolulu counties to explain the “Big Wind” concept and hear what residents of Oahu, Maui, Lanai and Molokai think about it.

The State Energy Office is supporting a wind energy plan to build two 200-megawatt wind farms, one each on Molokai and Lanai, and undersea cables to transit electrical energy to Oahu and within Maui County (as shown in the above diagram that accompanies today’s story on the meetings in the Honolulu Star-Advertiser).

The State sees Big Wind as an important component of the Hawaii Clean Energy Initiative and its goal of relying on renewable energy for 40 percent of Hawaii’s power needs by 2030. But Big Wind’s eventual success is by no means certain.

The Friends of Lanai group objects to the impact Castle & Cooke’s proposed 170-turbine wind farm would have on the island’s open space, which the Friends say would forever be altered. Molokai residents have repeatedly resisted efforts to change the nature of the “most Hawaiian island.”

The ‘Capacity Factor’ Factor

Life of the Land, which describes itself as “a Hawaii-based Environmental and Community Action Group,” believes ocean thermal energy conversion is a better option than Big Wind. LOL’s executive director says OTEC would cost less than Big Wind’s estimated $3 billion price tag.

Few media stories here mention “capacity factor” in their energy coverage, so we’ll mention it here in the hope reporters will soon acquaint themselves with the concept.

An argument can and undoubtedly will be made at this week’s hearings that on average, wind farms actually deliver only about 25 percent of their installed generation capacity to the grid due to wind variability, from full-on gale strength to dead calm.

Big Wind’s capacity factor also is likely to be around 25 percent, so on average, the Lanai and Molokai wind farms would export around 100 megawatts of electrical energy at a cost of $3 billion.

Life of the Land and many others (including this blog) believe Hawaii’s energy conversation must eventually take stock of the significant disparity between intermittent energy sources, such as Big Wind, and baseload sources like geothermal energy today and OTEC tomorrow.

Baseload plants have capacity factors approaching 100 percent. They operate around the clock and only reduce their output for planned maintenance and relatively rare unplanned outages.

Bigger Bang for the Buck?

In broad terms, Big Wind would deliver 100 megawatts of power at a cost of $3 billion. The question needs asking: How much power could be produced at the same cost by building more geothermal plants on the Big Island and/or finally taking the OTEC leap to develop the first and subsequent ocean thermal plants?

We’ve already suggested here that maybe Hawaii has to make a choice between technologies based on what we can afford. Others discount the need for such a choice and believe all energy sources must be up for discussion.

They undoubtedly have a point – that at no step along the path to energy independence can Hawaii afford to choose between green technologies. If Hawaii is to actually end all fossil fuel use within a few decades, we’ll have to tap all existing sources and develop new ones.

We don’t believe we can reach the goals set by HCEI and President Obama in his recent State of the Union speech with existing on-line technologies. New ones like OTEC, wave energy and hydrogen power and others will be required.

This week’s meetings will afford the opportunity to go beyond Big Wind to other big ideas – including, we anticipate, OTEC.

President’s Home State Can Provide Clean Energy Path; 80% Green Power Goal Will Need Ocean Component

“Race to the top” may be a national education program, but for truly audacious goal-setting, look no further than the President’s national goal to achieve 80-percent reliance on clean energy by 2035!

Until now, the Hawaii Clean Energy Initiative’s goal of achieving 40 percent from renewable energy by 2030 had seemed aggressive. As of this evening, it's passé.

Hawaii’s favorite son has seen that goal and upped the bet by going all in! Here’s how he stated his renewable energy challenge in his State of the Union Address and how he plans to pay for it:

That's what Americans have done for over 200 years: reinvented ourselves. And to spur on more success stories like the Allen Brothers, we've begun to reinvent our energy policy. We're not just handing out money. We're issuing a challenge. We're telling America's scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we'll fund the Apollo projects of our time.

At the California Institute of Technology, they're developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they're using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015.

We need to get behind this innovation. And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if – I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's.

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they're selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America's electricity will come from clean energy sources.

Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all -- and I urge Democrats and Republicans to work together to make it happen.

Back to the Sea

Mr. Obama’s far-reaching goal surely fires the imagination and fosters hope for a nation that can function without reliance on climate-damaging, economy-damaging oil.

Hawaii is poised to fire the nation’s collective imagination with the innovations we can initiate and achieve here in the Aloha State. The President didn’t mention it, but ocean thermal energy conversion – OTEC, what we’re calling Big Ocean – can be a 21st century technological breakthrough to change the energy game.

Can we truly achieve Mr. Obama’s 80-percent goal without a game-changing energy breakthrough? Can it happen only with intermittent wind and solar farms backed up with batteries, biofuels and nuclear power? Can his quantum leap be achieved without tapping the inexhaustible stores of solar energy in the world’s oceans?

For the sake of argument, we’ll suggest it can’t happen with existing technologies. It will take breakthroughs in one particular technology – ocean energy technology – and if it’s to happen, there’s no better place for it to begin than Hawaii.

Mr. President, look to your home state. Support efforts to fund development of a pilot plant in Hawaii to demonstrate OTEC’s viability to replace oil-fired electrical generation in Hawaii within a decade!

By the time the nation reaches your 80-percent goal, let’s ensure that Hawaii will already be solidly locked in at 100 percent!

Big Wind vs Big Ocean: Should Hawaii Make a Choice?

In a perfect world, every possible renewable energy technology would be available and used to the maximum extent practicable here. But even in our Hawaiian paradise, there are limits.

The Japanese plan to capture solar power in earth orbit and microwave it to ground stations. Bingo – an inexhaustible energy supply. But then there’s that word “practicable.”

Even if the technology were available today, would it pencil out? Would it be worth a massive infrastructure investment in Hawaii to capture solar energy in space and microwave it to islands that already have an abundant supply of solar energy?

Hawaii is ideally situated to tap into terrestrial solar energy – in the strong and steady winds that blow across the islands, in the tropical ocean that surrounds them and in the heat below the surface of some islands in the form of geothermal energy. Most would agree that using those sources is preferable than a much more expensive space-based solar system.

Asking THE Question

Let’s continue with another potential choice – between Big Wind, which is what they’re calling the plan to build two 200-megawatt windfarms on Lanai and Molokai, and what we’ll call Big Ocean, the potential to harvest even more energy from ocean thermal energy conversion. Should Hawaii build one and not the other?

Some are already asking questions and expressing opinions about Big Wind. A group called Friends of Lanai had a commentary at the online journalism site Civil Beat today. In short, the Friends don’t want 170 wind turbines, each over 400 feet tall, erected on their island to supply Oahu with electricity via undersea cables. The sacrifice is too great, they say.

They’re concerned about the cost to build the windfarms on the two islands and to construct and lay cables (including redundancy cables) between the islands and Oahu. A billion here, a billion there, and before you know it, you have a $3 billion price tag for Big Wind that could grow larger.

Is Big Ocean Competitive?

Some argue that much more power could be generated at less cost using OTEC plants floating free or moored in deep water a few miles off the islands, with much shorter and shallower cables connected to power grids.

Advocates (including Hawaii Energy Options for the past three years) argue that OTEC’s environmental impact to generate a like amount of electrical power as wind is much less than hundreds of towering structures on land.

But their home-run argument is that OTEC is baseload power, capable of operating continuously without regard to variables in wind strength and sunshine. To advocates, the argument comes down to baseload OTEC vs intermittent wind and solar farms, with baseload far superior.

Build Now, or Later?

But then there’s that other key factor. Wind power is proven technology after decades of trial and error, including right here on Oahu’s North Shore. Hawaiian Electric Industries built early generations of wind turbines in the hills near Kahuku, and those failures helped lead to successes in the current generation of turbines.

OTEC is still on the drawing boards after being touted as the energy game changer for decades, without one commercial-sized plant in service anywhere in the world. At first glance, there’s no competition; wind wins.

But Hawaii’s energy future reasonably shouldn’t be based on first glances. The technology we choose will be expensive – we’ll all pay for it one way or the other in our electric bills – and will be with us for generations.

Do we embrace Big Wind now, with its environmental impacts, intermittency and big cable costs, or do we hold off to develop the will and the investors to build that first OTEC plant to prove or disprove its worth, once and for all?

Some argue we can’t delay Big Wind if the state is to meet its Hawaii Clean Energy Initiative green energy goals. Big Ocean advocates say it would be wrong to rush to Big Wind and waste the opportunity to perfect a technology that could revolutionize energy production in the 21st century.

Big Wind vs Big Ocean. Stated that way, it does look like a competition of technologies. With only so much ability to financially support the green energy transformation of Hawaii, perhaps it should in fact come down to one or the other.

How Lanai Residents’ Issues with Wind Are Addressed Will Be Prelude to Big Island’s Geothermal Concerns

Getting Off Oil is a goal most in Hawaii support in the abstract, but as with most issues, taking action at the neighborhood or island level might be another matter.

Lanai residents voiced their concerns about the proposed 200-MW wind farm on their island at a State Capitol hearing yesterday, and those concerns are likely to be shared by Big Island residents concerning geothermal energy.

Kuokoa, Inc. has proposed a private-investor buyout of Hawaiian Electric Industries and transitioning the company’s utilities on Oahu, Maui, Lanai, Molokai and the Big Island to 100-percent reliance on renewable energy within 10 years. Kuokoa officials have said geothermal energy will play a big role in achieving that ambitious target.

But that can’t happen with only one 30-MW geothermal plant – the one operated by Puna Geothermal Venture Hawaii. Major expansion would be required, and maybe it’ll happen through creative approaches with those who’ve been opposed to expansion plans.

Each Island an Island?

Consider this view expressed yesterday by a Friends of Lanai representative concerning Castle & Cooke’s proposed wind farm:

“Each island should be independent amongst themselves…. Not dependent on other islands and other people to feed their needs.”

Such extreme independence would of course make Lanai virtually uninhabitable, but comments like this undoubtedly reflect the views of many on the neighbor islands. Achieving fossil fuel-free energy independence throughout the state certainly will require exporting energy from those islands to Oahu in one form or another.

How Castle & Cooke, the State, First Wind, Kuokoa and other renewable energy developers address those concerns will determine whether they achieve their renewable energy goals in the decades ahead.

Startup’s Plan for 100% Green Energy in 10 Years Begs The Question: What Technology Will Replace Oil Plants?

We called Kuokoa Inc.’s proposed takeover of Hawaiian Electric Industries the “biggest energy-related story in Hawaii of this young century” yesterday, and others are giving it enough attention to merit the description.

The Star-Advertiser features the story on page one today but doesn’t go beyond quotes, comments and reactions from analysts and executives about the start-up’s intention to take HEI private.

Here’s the big unanswered question we’re posing to Kuokoa’s leadership: What technology will you use for baseload power generation if you retire HEI’s fossil fuel plants within a decade?

Oil and coal are burned to generate close to 90 percent of the electricity produced by HEI’s utilities in baseload generation plants, which churn out electrons around the clock. Battery storage is still in its infancy and is unlikely to be anywhere near ready to provide on-demand power when intermittent wind and solar sources can't. How Kuokoa replaces HEI's current baseload generation is the big issue the media have so far ignored.

OTEC’s Opportunity

But not Hawaii Energy Options. As we said in our first post on March 14, 2008:

“Ocean thermal energy conversion is the best long-term technology solution to reduce Hawaii’s dependence on imported oil. OTEC is far superior to the other energy alternatives touted for electric power in the Aloha State – so superior in replacing oil for baseload electricity generation that any legislator, government official, utility executive, energy expert or environmental leader who doesn’t support OTEC is simply not believable.”

To that list we’d add executives of companies who propose taking over utilities that burn billions of dollars of fossil fuel annually. How Kuokoa answers our question will have more to do with its prospects for success than whether it can raise the money to buy HEI.

Kuokoa CEO Roald Marth is quoted as saying it won't be difficult to raise the $2 billion-plus. Reporters so far apparently haven’t asked him about the hard part – actually replacing upwards of 2,000 megawatts of fossil fuel power generation with baseload renewable power – units that reliably deliver electricity 24 hours a day, every day, rain or shine.

Baseload Options Are Few

As we noted here a couple days ago, Kuokoa chairman Richard Ha was a guest on our Hawaii Public Radio program “Energy Futures” nearly a year ago while the show was still on the air. He expressed interest in developing the Big Island’s geothermal resource to a greater extent than the single power plant now operating in the Puna district.

Maybe Kuokoa thinks geothermal can be the baseload wave of the future, but obstacles to the island of Hawaii becoming the power source for the entire island chain are formidable.

Opposition by environmentalists and cultural practitioners blocked plans to develop a 500-MW geothermal field in the 1990s, and there are reasons to believe opposition would resurface if new plans were launched to exploit "Pele power."

Then there’s the matter of financing and building a deep water cable between Hawaii and Maui. If connecting Lanai and Molokai to Oahu with a cable would cost an estimated $1 billion, we can only imagine what laying a cable through the much deeper Alenuihaha Channel between Maui and the Big Island would cost. That expense could be avoided and geothermal energy still used statewide by using that power to create hydrogen, which could be shipped to the other islands.

Carpe Diem

OTEC advocates have been pounding on doors for decades, trying to convince financiers that OTEC technology is ready for deployment. All it needs is backing to take that first leap – to build that first commercial plant to demonstrate OTEC’s technology and ability to be scaled up quickly.

As they and we have said repeatedly, OTEC has the potential to provide all the electrical power and hydrogen fuel the islands could ever use, and more. What’s been missing until now is the will and vision to make it happen.

Is Kuokoa prepared to provide those essential ingredients that would result in OTEC finally coming of age? The days immediately ahead could provide the answer.

Startup Company Proposes Takeover Offer for HEI, Would End Fossil Fuel Generation within 10 Years

It’s arguably the biggest energy-related story in Hawaii of this young century. Startup company Kuokoa Inc. has announced its intention to buy out Hawaii Electric Industries (HEI) and take it private, create a statewide electricity rate of 20 cents per kilowatthour and phase out all fossil fuel power generation within a decade.

Call it what you will – one skeptic calls it “a comedy” – but Kuokoa’s plan on its surface is enough to make hearts beat faster for those who thought getting off oil for electrical generation in Hawaii might take four decades, not one.

Kuokoa’s website is in a holding pattern with nothing beyond the home page; what little information is available on the plan was found online first at Honolulu-based Civil Beat and later at the Honolulu Star-Advertiser and Pacific Business News. Civil Beat continues to be out in front and posted an update on HEI's initial reaction to the proposed takeover.
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4:45 PM UPDATE: Hawaiian Electric Company and Castle & Cooke have signed a Power Purchase Agreement for wind energy generated on the island of Lanai.  HECO's press release has details.
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According to those sources, Kuokoa’s leadership includes Big Island farmer Richard Ha, chairman; venture capitalist Roald Marth, CEO, and Ted Peck, president. Today is Peck’s last day as State Energy Administrator.

Will HEI Turn 30?

Whether HEI will reach it’s 30th anniversary in June remains to be seen. The holding company was formed in the summer of 1981, a creation of Hawaiian Electric Company’s president and CEO C. Dudley Pratt, Jr. We wrote about Pratt's HEI career in May after his death.

Pratt anticipated Hawaii’s green energy revolution even before he was elevated to HECO’s corner office earlier that year, and he set about to implement a diversification plan for the state’s largest utility that he first wrote as an MBA student at the University of Hawaii.

HEI became the parent company of HECO, which had the Maui and Big Island utilities as subsidiaries and still does. Other HEI subsidiaries were created, starting with Hawaiian Electric Renewable Systems, the vehicle for building a wind farm in the hills above Kahuku.

Pratt envisioned HEI as the provider of essential services to Hawaii’s population, and he expanded HEI by acquiring American Savings Bank, Hawaiian Tug & Barge and Young Brothers (inter-island cargo shipping). HTB and YB were acquired by SaltChuk Resources, Inc. of Seattle, WA in 1999, but ASB is still owned by HEI.

The 10-Year Plan

Kuokoa reportedly intends to sell the savings bank, but the most eye-catching part of its plan is the company’s intention to “write off HEI’S fossil-fuel burning assets and invest billions to convert the power-generating system to entirely renewable energy within 10 years,” according to the Star-Advertiser report.

If achieved, this plan would leave the Hawaii Clean Energy Initiative in its dust – a plan Peck was central to helping create among signatories HEI, the State of Hawaii and the U.S. Department of Energy.

HCEI’s current goal is to curb fossil fuel dependence for power generation to 30 percent by 2030, with renewable energy supplying 40 percent and conservation accounting for a 30-percent reduction in demand. Hitting the Target Zero Goal within 10 years seems remarkably ambitious – enough so to fire the imaginations of those who recognize oil’s stranglehold on the state and its people.

Premium gas costs $3.799/gallon at many Oahu stations – up 5 cents per gallon since yesterday – and regular gas costs up to and beyond $4/gallon on some of the neighbor islands. Predictions for the price of oil may be a dime a dozen and unreliable, but even so, predictions that oil will hit $150/barrel by this summer have a sobering effect.

We’re eagerly looking forward to more details about Kuokoa’s plan and will relay them as they become available.http://www.heco.com/vcmcontent/StaticFiles/pdf/20110107_C&C-HECO_LanaiAgreement.pdf

HECO ‘Spreads the Wealth’ to Support Biofuel Use; Customers on All Islands To Pay for Big Isle Power; BREAKING NEWS: Scroll Down for a Blockbuster

We can’t wait forever for ocean thermal energy conversion to live up to its hype, so it’s great that other local renewable options are coming on line. The latest is biofuel, as announced today by Hawaiian Electric Company. HECO has signed a contract with Aina Loa Pono, a local company that will supply biofuel grown on the Big Island for use in the Keahole Point power plant operated by HECO subsidiary Hawaii Electric Light Company.

THIS JUST IN at 8 PM: According to online subscription news service Civil Beat, a local group "aims to buy out Hawaiian Electric." Ted Peck, whose last day as State Energy Administrator is tomorrow, is said to the president of the company, called Kuoloa Inc. Noted Big Island farmer Richard Ha is also involved. Ha was a guest nearly a year ago on Hawaii Public Radio's "Energy Futures" program when the topic was sustainable agriculture. He expressed considerable interest during the program in Hawaii Island's geothermal energy potential, and it's possible Kuoloa Inc. will investigate ways to develop the resource. Peck was a program guest on three occasions, including our first and final shows. Hawaii Energy Options will be following this story in the days ahead with considerable interest.

The contract contains a provision that seems to be a “first” in Hawaii. Quoting from HECO’s press release:

“Subject to approval by the Public Utilities Commission, with input from the Consumer Advocate, the contract would initiate an innovative plan to provide economic support to Hawaii Island customers while encouraging more renewable energy statewide. It asks for the PUC to spread among customers of Hawaii Electric Light Company, Maui Electric Company and Hawaiian Electric Company the difference between the price of locally grown and produced biofuel and the fossil fuel it replaces.”

In other words, customers on all islands served by HECO and its Maui Electric and HELCO subsidiaries will help pay for power produced by Aina Loa Pono and consumed only by HELCO customers on the Big Island. HECO’s release says the subsidy would add less than 1/3 of a cent per kilowatthour, or between $1.55 and $1.86 per month for customers whose monthly use is between 500 and 600 KHW.

It seems like an innovative way to help spur development and use of renewable energy on one island when the cost of doing so might be too much for that island’s customers to absorb.

Price and terms of the biofuel contract are being kept confidential for now, so we don’t know how much more expensive the locally grown fuel will be per KWH than the fossil fuel it replaces. HECO’s release notes that the cost of oil is likely to surpass the biofuel’s cost over time.

In sum, this seems like a favorable development in Hawaii’s decades-long quest to Get Off Oil, an innovative approach that might find its way into other renewable energy contracts.

As philosophers like to remind us, the ocean connects rather than separates our islands. The new Aina Koa Pono contract is a tangible way for residents of many islands to help the residents of one of them reduce oil imports and keep some of that money at home.