Hawaii Clean Energy: Part 2 -- Summary of a Presentation

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

Presentation to Hawaii Conservatives in Hilo, Hawaii, on February 27, 2011

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.

• In Spain, it was found that for every 1 "green job" financed by the Spanish taxpayers, 2.2. jobs were lost from the overall economy.

• In Germany, "green" jobs financed by the government disappeared as soon as government subsidies ended.

• One electrical vehicle is the equivalent of a small house in power consumption.

• He himself had a solar system on his roof at home, but the $14,000 system cost him a net $4000 only after state and federal subsidies

• After 30 months, countless TV appearances, and $80 million spent on an extravagant PR campaign, T. Boone Pickens has finally admitted the obvious: The wind energy business isn't a very good one. He's abandoning the wind business to focus on natural gas. On a national scale, it is expected the US will transition heavily from present 49% coal/21% natural gas to 40% cheap natural gas/25% coal.

• Denmark, the poster child of wind energy production at 20%, has to sell much of its peak power to neighboring Norway and buy from them a steady base load in return, as wind is incapable of a steady supply.

• Wind cannot work in Hawaii, as we have no nearby neighbor for such a deal. What are we going to do, turn the elevators on in Waikiki when the wind blows, then turn them off when it stops? Impossible."

• Turning food to energy is no good either. " Food prices world wide are rising as a result. " Former vice president Al Gore said that he regrets supporting first generation corn-based ethanol subsidies while he was in office. Gore said his support for corn-based ethanol subsidies was rooted more in his desire to cultivate farm votes for his presidential run in 2000 than in doing what was right for the environment: "It is not a good policy to have these massive subsidies for first-generation ethanol".

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.

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.