RENEWABLE ENERGY IN HAWAII
Presentation by Hawaii State Representative Barbara C. Marumoto
Women In Government, Fourth Annual Energy Summit
Des Moines, Iowa July 19, 2012
(NOTE: This presentation is not meant to be exhaustive in scope, but is intended to highlight some notable areas
of renewable energy development in Hawaii – and how Hawaii is unique in certain aspects.)
1. HISTORICAL CONTEXT AND BACKGROUND
a. Introduction
i. Over the past few decades, Hawaii has made significant progress in the areas of
geothermal energy, ocean thermal energy conversion, wave energy, wind energy,
photovoltaic solar energy, and bioenergy.
ii. In 2008, Enterprise Honolulu (a private economic development board based on Oahu)
stated that “Hawaii has all the desirable renewable energy sources and facilities to
become a significant player in the renewable energy market. The state’s prominence
as an ideal ‘living laboratory’ for validation of alternate energy technologies is
attracting more companies into the state.”
b. Hawaii's Dependence on Fossil Fuel
i. Hawaii depends on imported fossil fuels to meet over 90 percent of its energy needs.
ii. This dependence leaves Hawaii vulnerable to supply disruptions and high energy
prices, with estimates showing that every 10 percent increase in world oil prices
results in a 0.5 percent reduction in the State’s GDP.
iii. Hawaii’s isolation means any imported goods such as food, clothing, building
materials, and gasoline can cost 30% more than mainland prices, due to the need to
transport these things to our state.
iv. In recent months, gas prices for the island of Oahu were well over $4 a gallon. Prices
on the neighbor islands are even more (due to additional transportation costs).
v. Although Hawaii has two refineries (Chevron and Tesoro), all of the crude oil must be
imported. Unlike most U.S. refineries which concentrate production on gasoline, most
of Hawaii refinery production goes to making jet fuel and diesel for airlines and U.S.
military installations like the naval base at Pearl Harbor.
c. Hawaii's Energy Monopoly
i. A single electric utility, the Hawaiian Electric Company (HECO) and its subsidiaries,
serves 95% of the state’s 1.2 million residents on the islands of Oahu, Maui, Hawaii
Island (the "Big Island"), Lanai, and Molokai.
ii. Exception: the island of Kauai, home to about 67,000 residents, has its own energy
cooperative.
d. Hawaii's Clean Energy Initiative
i. The Hawaii Clean Energy Initiative is a federal-state-private partnership between the
U.S. Department of Energy, the State of Hawaii, and Hawaiian Electric Company. The
initiative calls for Hawaii to decrease energy demand and increase use of renewable,
indigenous energy resources across the residential, building, industrial, utility, and
transportation end-use sectors.
ii. The benchmark for this initiative is for renewable energy resources to supply 70
percent of Hawaii’s energy demands by 2030 (30% reduction through energy
efficiency measures, plus 40% of electricity sales coming from locally generated
renewable sources).
iii. In 2009, the Hawaii State Legislature codified this initiative by passing House Bill 1464,
which was signed into law as Act 155. As a result, Hawaii’s clean energy goal can be
considered the most aggressive in the nation.
iv. Part of the reason Hawaii is the most fossil fuel dependent state in the nation is our
dependence on tourism and the military – together, they make up roughly 50% of our
total economy. That’s a dangerous scenario for the future because of the finite nature
of fossil fuel, and the fact that our state is more and more vulnerable to fluctuations in
oil prices and availability.
2. RENEWABLE ENERGY IN HAWAII – HIGHLIGHTS
a. Geothermal Energy
i. Geothermal energy is obtained by drilling wells into geothermal reservoirs to bring hot
water and steam to the surface. Once the hot water and/or steam travel up the wells
to the Earth’s surface, they are harnessed to generate electricity. Volcanoes, hot
springs, and geysers are some of the visible features of geothermal energy.
ii. As early as 1881, Hawaii’s King David Kalakaua visited Thomas Edison in New York
to discuss extracting power from Hawaii’s volcanoes and using underwater cables to
carry power between islands. At that time, native Hawaiians were already using
volcano steam for cooking.
iii. In Hawaii, geothermal exploration began in the 1960’s. In 1976, a public-private
partnership dug the first geothermal well in Puna, on the Big Island.
iv. Since 1993, Puna Geothermal Venture has been supplying electricity to the Big Island
grid, through a power purchase agreement with HECO. Its 30-megawatt capacity
plant is only 24 feet high, and has near zero emissions. 100% of its geothermal fluid
and gas are re-injected into the deep earth.
v. In 2011, Puna Geothermal Venture signed a power purchase agreement with HECO
to provide an additional 8 megawatts of geothermal power over the next 20 years.
vi. Geothermal energy supplies up to 31% of the state’s renewable energy resources,
and about 20% of the electricity used on the Big Island.
vii. Ultimately, Puna Geothermal Venture’s plant has the ability to reach 200 megawatts,
enough to serve all of the current electricity needs on the Big Island through
geothermal energy alone.
b. Wind Energy
i. Wind is plentiful on Hawaii’s islands. On Molokai and Lanai, where wind levels are
among the best in the country, wind is available 40% of the time. Overall, Hawaii has
wind resources consistent with utility-scale production. Good-to-excellent wind
resource areas are distributed fairly evenly throughout the islands.
ii. Wind farm development projects are numerous, and involve companies such as First
Wind, Sempra, Gen-X (Northern Power), and Castle & Cooke.
iii. Maui’s Kaheawa Wind Farm (owned by First Wind) is unique because it was the first
wind project in the U.S. with a detailed Habitat Conservation Plan. The area is home
to nene, the native goose of Hawaii. Once on the endangered species list,
conservation efforts have brought nene back to healthy population levels.
iv. In its first 5 years of operation (2006-2011), the Kaheawa Wind Farm saved about
900,000 barrels of oil. An expansion project was just completed, bringing the farm’s
current capacity to 51 megawatts. This is enough to power 18,700 Maui homes every
year.
v. Completed in 2011, the Kahuku Wind Farm (also owned by First Wind) is situated on
the North Shore of Oahu. The facility produces enough power to supply up to 7,700
homes.
vi. First Wind is also developing a 69-megawatt wind farm about 5 miles northeast of
Haleiwa town on Oahu’s North Shore. The project is expected to produce enough
energy to power about 14,500 Oahu homes. It could potentially supply as much as 510% of the Oahu’s electrical load.
vii. In 2011, the Oahu Wind Integration Study released a report detailing the impact of
wind energy on the Oahu grid. The study found that 500 megawatts of wind power,
along with 100 megawatts of solar power, could potentially supply 25% of Oahu’s
electricity. Because of political opposition and high cost, the 25% goal is questionable.
This would eliminate the need to burn approximately 2.8 million barrels of low sulfur
fuel oil and 132,000 tons of coal each year.
viii. Even wind energy can be controversial in Hawaii. People are concerned that too
many wind farms could spoil Hawaii’s natural beauty. Proposals to build 200megawatt wind farms on the small rural communities of Molokai and Lanai have been
met with vocal grassroots opposition. The intent is to have those islands supply
electricity to the main island of Oahu, the state’s “energy hog”. First Wind is seeking
to build a 200-megawatt wind farm on Lanai, while Molokai Renewables, LLC is
hoping to build a 200-megawatt farm on Molokai.
ix. It is envisioned that in the near future, a high-voltage undersea cable will transmit
electricity between the islands. For example, electricity generated by the windmills on
Lanai and Molokai (if they ever get built) could be sent to Oahu via such a cable. The
cable could cost Oahu ratepayers $1 billion.
x. During the 2012 legislative session, Senate Bill 2785 SD2 HD2 (Act 165), also known
as "The Undersea Cable Bill", became law. It establishes a regulatory structure for the
future undersea cable project. It also authorizes Hawaii’s Public Utilities Commission
(PUC) to establish a cable surcharge, so that Hawaiian Electric Company can recover
its cost of installing the undersea cable. Naturally, this will result in higher costs to
ratepayers.
c. Photovoltaic (PV) Solar Energy
i. Hawaii’s abundant, year-round supply of sunshine makes it ideal for the widespread
adoption of photovoltaic solar energy. Hawaii was the first state in the U.S. to reach
grid parity (the tipping point for solar power, when installing solar power costs less
than buying electricity from the grid).
ii. Not surprisingly, those who go “off-grid” after installing their own PV system (or other
renewable energy system) enjoy lower electricity costs, but that means ratepayers still
dependent on HECO will end up paying more, because there will be fewer of them to
subsidize HECO’s cost of doing business. Because HECO is allowed to make a profit,
it can ask the Public Utilities Commission for permission to increase its rates when this
happens.
iii. Our photovoltaic solar industry has grown significantly in the past few years. In 2011:
the state’s top 25 photovoltaic providers installed about 44,000 kilowatts of solar
power, more than double what was reported in 2009. This growth has been aided by
aggressive state and federal tax credits.
iv. In Hawaii, a typical residential system without battery backup can cost $15,000 or
more. Federal tax credits of 30% are available to partially subsidize residential
systems. The State of Hawaii’s 35% tax credit cap for single-family residential
systems is $5,000, while commercial systems are now eligible for credits up to
$500,000. The State also has a refundable tax credit option.
v. Some would say the state tax credit, which applies to any solar or wind powered
energy system, has been too generous. This past legislative session, there were
attempts to reduce the tax credit, which is said to have cost the state $40 million in lost
tax revenues.
d. Ocean Thermal Energy Conversion (OTEC)
i. Ocean Thermal Energy Conversion, or OTEC, produces electricity using temperature
differences between warm surface water and cold deep water. Hawaii is wellpositioned to harness this technology, because of our tropical location and deep
ocean water depths relatively close to shore. The temperature differential between
the Hawaiian Islands can produce 15% more energy than traditional OTEC plants.
ii. Closed-cycle OTEC uses low boiling point fluid being heated by oceans' warm surface
water to rotate a turbine, which produces electricity. There are two other types of
OTEC systems. The open-cycle system uses warm surface water, placed on a low
pressure container, to directly rotate the turbine, thus producing electricity. The hybrid
cycle system, a combination of open and closed cycle systems.
iii. Hawaii has been a leader in OTEC development. In 1979, Hawaii demonstrated the
world’s first production of net electrical power via closed-cycle OTEC, using an ocean
barge dubbed "Mini-OTEC," which was anchored offshore of Keahole Point on the Big
Island.
iv. Commercial use of OTEC as a renewable, non-polluting source of electricity may not
be that far off. Makai Ocean Engineering, based on Oahu, has partnered with
Lockheed Martin and the U.S. Navy to develop 100-megawatt OTEC plants for island
communities such as Hawaii and Guam.
v. The setting for OTEC research in Hawaii is NELHA, the Natural Energy Lab Hawaii
Authority. Two pipeline systems pump deep and surface seawater to shore 24 hours
a day, 7 days a week. A third pipeline, which will have a depth of 3,000 feet, is in
development.
vi. NELHA was created in 1974 by the State Legislature. Its mandate was to provide a
support facility for research on the ocean thermal energy conversion (OTEC) process
and its related technologies. In 1980, the facility and its first pipeline to draw deep
seawater from 2000 feet and surface seawater from 45 feet depths were constructed
on 322 acres at Keahole Point. OTEC research began in 1981. A few years later,
NELHA realized that the seawater being pumped up for OTEC research could also be
channeled into many other profitable uses.
vii. In 1985, the Legislature expanded NELHA and created a host park on an adjacent
548 acres of land, to encourage the development of OTEC and seawater related
businesses. Today, NELHA is "landlord" to nearly 30 research and commercial
enterprises that generate about $30-40 million per year in total economic impact.
viii. The seawater pumped up for OTEC research is put to a variety of uses. NELHA uses
a small-scale deep seawater air-conditioning (SWAC) system to cool three of its
research compound buildings. They are reportedly saving as much as $4,000 per
month in energy costs. Honolulu Seawater Air Conditioning has ambitious plans to
use this technology on a commercial scale, and provide cooling for about 40 buildings
in downtown Honolulu. The 25,000-ton system is estimated to cut electricity
consumption for air conditioning by 75% and reduce potable water and chemical use.
Other tenants on NELHA property use the seawater to produce abalone, lobster,
bottled water, and health supplements such as spirulina.
e. Biofuels
i. Biofuel is currently being developed from a number of sources in Hawaii.
ii. Big Island Carbon converts biomass feedstock into activated carbon, using material
such as discarded coconut and macadamia nut shells. The shells can be also be
converted into biofuels that can be mixed with diesel to power the company’s
processing facility.
iii. Pacific Biodiesel Technologies, Hawaii’s first commercial biofuel producer, has a
refinery on the Big Island that will process cooking oil, trap grease, and locally grown
crops into fuel for diesel engines.
iv. Honeywell UOP is conducting a pilot project at the Tesoro Corp. refinery in Kapolei to
convert various biomass resources (forest residuals, algae, and other cellulosic
biomass) into green gasoline, diesel, and jet fuel. It is expected to supply 50 million
gallons of fuel by 2014.
v. Phycal, Inc. will supply up to 150,00 gallons of algae-based biofuel to HECO’s Kahe
Generating Station as part of a pilot project that aims to produce up to 3 million gallons
per year.
vi. Hawaii’s year-round sun makes it optimal for outdoor algae cultivation. The use of
algae for fuel is advantageous, as it does not detract from the food supply, as does the
use of corn and other edible plants.
vii. Cellana, Inc. is a developer of algae-based bioproducts. Their Kona Demonstration
Facility, located at NELHA, has been operating since 2008 and grows algae in openair ponds. The company is developing microalgae strains that will help fuel a
commercial scale algae biomass plant on Maui, which will in turn supply energy to the
Maui Electric Company (HECO’s subsidiary on Maui). Algae grown at Cellana’s Kona
facility uses clean and recyclable seawater provided by NELHA.
f.
Wave Energy
i. Wave energy is produced when electricity generators are placed on the surface of the
ocean.
ii. Hawaii’s waves, among the most powerful in the world per square meter, provide
great potential for locally produced renewable electricity generation. This is due to its
position in the middle of the Pacific Ocean, with no continental shelf to slow down
waves.
iii. A federally funded report from the Electric Power Research Institute estimated that
waters around Hawaii are capable of producing up to 80 terawatt-hours of
“recoverable” electricity each year. That amount is eight times more than the 10
terawatt-hours of electricity consumed statewide last year. In other words, the
potential supply far exceeds current demand.
iv. In 2004, Ocean Power Technologies, a New Jersey based company, began testing its
PowerBuoy design on Oahu. The testing took place off of Kaneohe Bay, where
Hawaii’s Marine Corps Base is located. The testing program was managed by the
U.S. Navy, as part of its goal to power its bases with clean energy.
v. By late 2009, the company had successfully deployed its third generation of the
PowerBuoy, a 40-kilowatt model. In September 2010, the PowerBuoy became the
first wave energy device in the U.S. to hook up to an electrical grid, delivering a
nominal amount of electricity to the Marine Corps Base for about a year, until the
conclusion of the project in Fall 2011.
vi. The Navy, University of Hawaii, and U.S. Department of Energy have partnered in a
new project designed to speed up the commercial availability of wave energy. A
"Wave Energy Test Site" (also known as WETS) is planned for the same area. The
WETS site will allow wave energy developers to test their devices in real-life
conditions. It will provide anchoring systems and undersea power cables to
accommodate up to 3 wave energy devices. This congressionally funded project,
managed by Naval Facilities Engineering Command (NAVFAC), is intended to
demonstrate the feasibility of wave power for naval facilities worldwide.
3. ELECTRIC VEHICLE (EV) USE IN HAWAII
a. Hawaii is ranked as the top state for EV market penetration. It is estimated that EVs will
make up 6.7 percent of the Hawaii car market by 2017.
b. Our state has been aggressive in making EV charging easily and readily available to the
public. We are the nation’s leader for public EV charging ability on a per capita basis, with
one charging station for every 5,500 residents. There is a charging station in our state capitol,
too.