Wednesday, February 11, 2009

Clean energy: expensive, cost effective, and Hawai'i utilities are on board

What's different in the Hawai'i energy picture from a few years ago?

Lots of things clearly, but an important thing is this: The utilities get the concept of moving away from oil, and they're saying so.

Whether their actions in the negotiation chambers match the rhetoric remains to be seen, but the rhetoric is hopeful.

At a public meeting on the Hawai'i Clean Energy Initiative (HCEI), representatives of all the state's big power companies—KIUC for Kauai, and HECO for the rest of the islands—said they are firmly committed to moving away from fossil fuels.

Although they said they've been moving in this direction a long time, it was clear that the stunning oil shock of 2008 was key in helping grease the skids.

“$147 a barrel oil was wrecking Hawai'i's economy,” said Robbie Alm, executive vice president for Hawaiian Electric.

HECO is looking forward to an undersea cable-connected future in which wind energy from Molokai and Lana'i, and geothermal from Hawai'i can help feed the Honolulu demand. There isn't space anywhere on Oahu for the size of windfarm needed, Alm said.

Current cable technology can't handle the more than two-mile depth of the Ka'ie'iewaho Channel, so Kaua'i has certain challenges that the interconnectability of the other islands helps solve.

KIUC sees a long-term role for liquid fuels at least as a backup for intermittent alternative energy sources, but that fuel can be biodiesel, said Randy Hee, KIUC president.

Both companies are pushing forward on smart metering, which Alm said can mean lower rates for people who actively shift their power demands to the utility's low-demand periods.

That capability will “allow us to reward you,” Alm said.

Hee said KIUC is in the “selection analysis” process for (get familiar with this term) AMI. That's Advanced Metering Infrastructure. Depending on what system is selected, this allows all sorts of advances on the grid—including the aggressive addition of intermittent green power options.

Both Alm and Hee said their organizations are also ready to back “feed-in tariffs.” That's another term to get used to. It refers to a guaranteed rate of return for alternative power production, even if it is, for now, higher than the current cost of oil-produced energy.

Feed-in tariffs in the short term can mean slightly higher power rates. But in Europe they have resulted in fast increases in solar, wind and other alternative energy production, and the long term value is stabilized power rates and reduced vulnerability to oil price fluctuations.

Both Hee and Alm said their utilities are prepared for the decoupling of revenues from sales—so they don't lose money as they move away from fossil fuels and in-house power production, and as more customers reduce their utility draw with solar photovoltaics, solar hot water, windmills and so forth.

It isn't clear that this level of commitment by the utilities existed five years ago, but it clearly seems to exist now.

And why is it a good idea to move in that direction?

“It's expensive, but it's cost effective,” said Bill Parks, the U.S. Department of Energy official assigned to Hawai'i. Parks is a DOE deputy assistant secretary for electricity and energy reliability.

The HCEI meeting was held in a Lihu'e church, and was sponsored by the Kaua'i Planning and Action Alliance, Apollo Kaua'i, KIUC and the Kaua'i Economic Development Board. Speakers included Parks, Alm, Hee and Hawai'i state energy facilitator Joshua Strickler, along with county energy coordinator Glenn Sato.

One message was this: It can be hard to push dollars toward more expensive renewables when oil's selling at $40 a barrel, but speakers said it's costing the Saudis $70 to pump that oil out of the ground. When the world's economy recovers, and nations are capable of paying, oil prices will bump back up. And at $70 or more, most of the green power options are competitive with oil.

The point: Pay a little more now, to pay less later, or as Parks said: “It's expensive, but it's cost effective.”

Read more on HCEI here and here and here.

The powerpoints for the Lihu'e HCEI meeting will be posted at the KPAA website.

©2009 Jan TenBruggencate


Keahi Pelayo said...

Expensive and cost effective, how do these words end up in the same sentence?

Chip said...

I would like to install one of two plants in Hawaii. One which produces renewable energy from wave which connects to the power grid 7/24 and a sea water filtration plant. Not only are we cheaper, we are cleaner as well. Zero fish kill and zero emissions.

Anonymous said...

Where is your sense of outrage that this two hours produced absolutely nothing? Jan, you have been on this rock way too long. Jerry