I went to a talk in Waimea last night, and it's just exactly what the Big Island Community Coalition (BICC) is talking about.
Parker Ranch CEO Dutch Kuyper was talking about the new venture Paniolo Power. From the website:
During 2013, Parker Ranch embarked on a comprehensive integrated resource planning effort to explore the possibility of reducing the cost of electricity for the Waimea community.
Parker Ranch lands are endowed with significant potential energy resources. These resources include wind, solar, biomass and, possibly, geothermal.
Parker Ranch commenced a utility-grade resource planning effort to explore whether a compelling alternative strategy could be both economically and technically feasible as compared to the resource plans produced by the incumbent utility.
The management team prioritized the study of whether a “community micro grid” could benefit the residents and businesses of Waimea – the hometown of Parker Ranch.
This website will provide information and perspective on our energy planning efforts. At present, our efforts continue in the research phase. At each stage of our progress, we will report our findings on www.paniolopower.com.
We will also be meeting with our community on a periodic basis to engage our friends and neighbors to help everyone understand the purpose of our efforts.
We look forward to sharing our efforts with you in the future.
Aloha and mahalo,
Paniolo Power Company, LLC
This is exactly the kind of thing that the BICC is interested in. This will benefit the whole community in Waimea. It's about all of us; not just a few of us.
The other day Richard gave some of us a tour of Hamakua Springs Country Farms in Pepe‘ekeo, and its new hydroelectric plant, and wow. I hadn’t been out to the farm for awhile, and it was so interesting to ride around the 600 acres with Richard and see all that’s going on there these days.
Most of what I realized (again) that afternoon fell into two
broad categories: That Richard really is a master of seeing the big picture, and that everything he does is related to that big picture.
Hamakua Springs, which started out growing bananas and then expanded into growing the deliciously sweet hydroponic tomatoes we all know the farm for, has other crops as well.
These days there are farmers leasing small plots where they are growing taro, corn, ginger and sweet potato. These farmers’ products go to the Hamakua Springs packing house and Hamakua Springs distributes them, which speaks to Richard’s goal of providing a place for local farmers to farm, wherethere is water and packing and distribution already in place.
The water wasn’t running through there the day we were there because they’d had to temporarily “turn it off” – divert the water – in order to fix something, but we could see how the water from an old plantation flume now runs through the headworks and through a pipe and into the turbine, which is housed in a blue shipping container.
This is where the electricity is generated, and I was interested to see a lone electric pole standing there next to the system. End of the line! Or start of the line, really, as that’s where the electricity from the turbine is carried to. And from there, it works its way across the electric lines stretched between new poles reaching across the land.
He asked the children who were along with us for their ideas
about how to landscape around the hydroelectric area, and also where the water leaves the turbine to run out and rejoin the stream.
“We could do anything here,” he said, asking for thoughts, and
we all came up with numerous ideas, some fanciful. Trees and grass? A taro lo‘i? Maybe a picnic area, or a water flume ride or a demonstration garden or fishponds?
There are interesting plans for once the hydro system is operating, including a certified kitchen where local area producers can bring their products and create value-added goods.
Other plans include having some sort of demo of sustainable
farming, and perhaps ag-tourism ativities like walking trails going through the farm, and maybe even a B&B. “The basis of all tourism,” he said, “is sustainability.”
Hamakua Springs is also experimenting with growing mushrooms
now, and looking into several other possibilities for using its free
As we stopped and looked at the streams we kept coming
across, which ran under the old plantation roads we drove upon, Richard made an observation that I found interesting. In the Hawaiian way, the land is thought of as following the streams down from mountain to sea. In traditional ways, paths generally ran up-and-down the hill, following the shape of the ahupua‘a.
“But look at the plantation roads,” he said, and he pointed
out how they run across the land, from stream to stream. The plantation way was the opposite. Not “wrong” – just different.
Richard has plans to plant bamboo on the south sides of the
streams, which will keep the water cool and keep out invasive species.
At the farm, they continue to experiment with raising
tilapia, which are in four blue pools next to the reservoir.
June with a full net
The pools are at different heights because they are using gravity to flow the water from one pool to the next, rather than a pump. Besides it being free, this oxygenates the water as it falls into the next pool. They are not raising the fish commercially at present, but give them to their workers.
Everything that Richard does is geared toward achieving the same goal, and that is to keep his farm economically viable and sustainable.
The hydroelectric system means saving thousands per month in
electric bills, and being able to expand into other products and activities. It means the farm stays in business and provides for the surrounding community. It means people have jobs.
When he says “rubbah slippah folk,” Richard told me, he’s always thinking first about the farm’s workers.
This, by the way, is really a great overview of how Richard describes the “big picture.” It’s a TEDx talk he did awhile back (17 minutes). Really worth a look.
It was so interesting to see firsthand what is going on at the farm right now, and hear about the plans and the wheres and whyfors. Thank you, Richard, for a really interesting and insightful afternoon.
Our new hydroelectric system is almost ready to go.
We received a County permit to put a power line under the single lane County road, and that was finished several weeks ago. All the overhead lines are in place now.
All we need to do is hook up the ends and we will be generating electricity from the river.
Our vision is to use the electricity to help area farmers consolidate and ship their produce to market along with ours.
Our hydro project is an attempt to stabilize farmers’ costs. Farmers and food manufacturers here in Hawai‘i – where we use oil for more than 70 percent of our electricity generation, compared to the Mainland where they use oil to generate only 2 percent of their electricity – are at a disadvantage when it comes to importing food products.
Lots of veteran Big Island farmers are considering selling, instead of passing their farm on to the next generation. The quadrupling of energy costs in the last 10 years had been just too hard for them to adjust to.
Our farm uses approximately 30 kilowatts of electricity, and we will generate more than 70 kilowatts.
We’re asking people for ideas about what to do with the excess electricity. One idea is to cold treat temperate fruit and fool it to think it’s growing in Washington, sort of like what they did at NELHA. I that case, they ran cold water by temperate crops and gave them the cold treatment that way.
West Hawaii residents described to the Public Utilities Commission how they have cut back on energy usage, and questioned why Hawaiian Electric Light Co. shouldn’t have to bear the costs of upgrading its own equipment.
The questions continued as the PUC heard comments from residents Tuesday evening on a proposed contract between HELCO, Oahu’s Hawaii Electric Co. and Aina Koa Pono for a biodiesel project in Ka‘u.
Albert Prados, manager of the Fairway Villas at Waikoloa Beach Resort, was one of more than 20 people who testified against HELCO’s rate increase request, which HELCO officials would raise rates 4.2 percent, or about $8 per an average 500 kilowatt hour monthly bill. Prados described the measures he has taken in his own home, including shutting everything off except the refrigerator at night, to lower his electricity bill. Read the rest
Mayor Kenoi took a very strong stand on renewable energy. He
made clear that it is not sufficient that it be renewable; it also needs to be affordable. He is concerned about the most defenseless among us.
He said, This is the kind of project that 20 years from now, we will be asking, “How did we let that happen?” He also said that we are doing this for the benefit of HEI and HECO – but that there is no benefit for the Big Island. The Mayor is very aware that high and rising electricity costs threaten our economy and also the folks on the lowest rungs of the economic ladder.
Rep. Denny Coffman asked, “How is it we are here? This is not even proven technology.” He pointed out that the electric utility is setting the state’s energy policy, and that that should stop while we finish the Integrated Resource Planning process that’s happening right now. Rep. Coffman understands the energy situation worldwide and he knows it’s foolish to be chasing unproven technology. It is both a waste of time and money. In Hawai‘i, we do have proven technology that is affordable.
To answer the Consumer Advocate’s question, “Would we change our minds if all the costs were given to the Oahu rate payers?,” the answer is no! I think that giving AKP a 20-year contract will forego the opportunity of developing lower cost alternatives. And it will take up valuable time. Liquid natural gas is an option. Ocean energy might be ready within the 20-year period. Geothermal is an affordable, proven technology. For instance, there is an 11 cent difference between geothermal and oil today. We could replace liquid fuels with 80MW of geothermal electricity, and apply that savings to pay the remaining debt of the Keahole 80 MW liquid fuel burning plant.
(80 MW is equal to 80,000 kilowatts. That 11 cents/kilowatt hour savings multiplied by 80,000 kilowatt hours equals $8,800 that you save each hour. And the savings per day is $211,200. That times 365 days equals an annual savings of $77 million. That is enough to write off the plant and still give the rate payers a break.)
Consumer Advocate Jeff Ono asked: “If O‘ahu rate payers would pay the cost, would you still be against the AKP project?”
Most of the time, making electricity has to do with making steam to turn a turbine. You can burn coal to make steam, or you can burn oil to make steam. You can burn firewood to make steam, or use the steam from underground – that’s geothermal.
AKP takes the long way. They grow plants using fossil fuels,
then they use electricity to make microwaves to vaporize the plants, then take the liquid that rises and convert it to a burnable liquid, and haul it to Keahole, where they burn it to make steam.
It isn’t surprising that it is expensive.
More than a few engineer folks tell me that this process
uses more energy than it makes. And if that is the case, it will always be more expensive than oil. This is not a good bet for us.
Palm oil is the only biofuel today that can compete heads up
with petroleum oil. It produces 600 gallons of oil per acre. AKP strives to produce 16 million gallons per acre, plus another 8 million gallons – or 24 million gallons from 12,000 acres. That is 4 times as productive as palm oil, the only biofuel that competes straight up with petroleum oil. If it works, they don’t need any subsidy from us. If it works, they will all end up billionaires.
We cannot predict the price of oil. But people are hurting right now. And if oil prices reach $200 per barrel, the tourism industry will be devastated and everything connected with it will shrink. We do not have the luxury of time. We need a lower cost alternative right now.
Well-respected Council of Revenues economists Paul Brewbaker, of TZE Economics, and Carl Bonham, Executive Director of the
University of Hawaii Economic Research Organization (UHERO), agree that low-cost energy is a key component of our economic future.
There are alternatives to $200/barrel biofuel. Geothermal is the equivalent of $57/barrel. Liquid natural gas is low cost now on the
mainland, and maybe ocean energy will be an alternative within the time period of the contract.
We need lower cost electricity, not higher, and AKP is not the answer. The AKP project is wasting valuable time, and we need to put it to bed so we can focus our attention on the next projects.
I agree with the electric utility from here forward. The next PUC hearing will be on the Hu Honua biomass plant at Pepe‘ekeo. They will use wood chips to boil water and make steam. This is proven technology and it looks to be cost effective.
After that will be a proposal for 50MW of geothermal. Geothermal does not have to burn anything. It just uses the steam underground to make electricity and it is cost effective.
At that time, HELCO with its leverage should be able to successfully renegotiate the old contract that is tied to oil. Then we will be well on our way to protecting ourselves from the volatility of world oil prices. Those two projects will result in a total of 110 MW of stable, affordable electricity using proven technology.
We need to strive for balance and common sense as we try to make things work for everyone. Hospitals, schools, hotels and businesses need the electric services provided by the grid. Fifty percent of our people rent and so cannot get off the grid. We need to be practical, and help to make sure the electric utility is healthy as we strive for a lower cost to the rate payer.
Last night, I spoke at the Laupahoehoe Community Association meeting and shared the perspective I have gained from watching the world oil supply subject evolve over a short five years.
I related how I have attended four Peak Oil conferences, most recently as Hawai‘i County’s representative. The first thing I learned was that the world has been using twice as much oil as it has been finding for 20 to 30 years – a trend that continues.
Five years ago, oil prices were supply driven. When supply was restricted, oil prices rose, and when oil supply resumed, prices fell.
Last year, that correlation fundamentally changed. We now have a demand problem. And the demand is coming from the new economies: China, India and others.
That’s why, during this recession, we still have $100 per barrel oil. Unlike during the last 150 years, supply cannot seem to keep up with demand. If you are a subscriber to Nature magazine, or don’t mind becoming one, you can read a good article about that here.
Oil’s tipping point has passed
The economic pain of a flattening supply will trump the environment as a reason to curb the use of fossil fuels, say James Murray and David King.
…There is less fossil-fuel production available to us than many people believe. From 2005 onwards, conventional crude-oil production has not risen to match increasing demand. We argue that the oil market has tipped into a new state, similar to a phase transition in physics: production is now ‘inelastic’, unable to respond to rising demand, and this is leading to wild price swings…. Read the rest here
World oil supply is naturally declining at approximately five percent, meaning we need to find the equivalent of a Saudi Arabia every two to three years. Clearly we have not been doing that, nor is it likely we will do that.
To make matters worse, oil-exporting countries are forced to use more of the oil resource in their own countries or the people will revolt. Sooner or later, oil-exporting countries will keep all its oil for its own people. All the signs indicate that we have much less time than we think.
I told the folks that most of us, except the native Hawaiians, were immigrants. We all dream of a better future for our children and grandchildren, and rising oil prices are a threat to that dream.
We are very lucky, though, to have an indigenous alternative – Geothermal. Generating electricity from geothermal costs approximately 10 cents per kilowatt hour, while generating electricity from oil (at $100 per barrel) costs more than 20 cents per kilowatt hour. Geothermal-generated electricity prices will be stable for generations, while oil prices will keep on rising.
I was preaching to the choir. They wanted to know what could be done. I told them to contact their legislators and that I would make sure to keep in contact with their organization.
It is clear that the momentum toward geothermal has shifted.
There have been numerous community meetings on the Big Island, where the overwhelming number of Hawaiians are in favor of geothermal if it is done in a pono way: It needs to be culturally sensitive and benefit the community, and before we implement geothermal, it must be shown that its use is environmentally benign.
People on the Big Island are very aware that geothermal electricity is much cheaper to produce than oil- or biofuel-generated electricity. They expect to see a difference on their electric bills.
This major change will be very challenging for the electric utility as it tries to translate geothermal production into lower electric bills. But they have the best people working for them; they are our friends and neighbors. Actually, they are us.
I spoke at a plenary meeting for federal, state and private enterprise energy experts yesterday at the Honolulu Convention Center. It was put on by the Department of Business, Economic Development and Tourism. I want to share my speech here, too:
We farm 600 fee simple acres on the Big Island. I am the only person from Hawai‘i to have attended what is now four Peak Oil conferences. I went to the first conference so I could learn about oil, and figure out how to position our farm for the future.
I have an accounting degree. But, as a farmer, I would say our biggest strength is that we are good at adapting to change.
Here are some key observations:
1. The world has been using twice as much oil as it has been finding for more than 20 years. And that trend continues.
2. Economies run on energy. If you take a chainsaw and a gallon of gas, you will cut so many trees. If you take that chainsaw and a half gallon of gas, you will cut less. It’s the same for the world economy. Energy growth is tied to economic growth. If energy is not available in sufficient amounts, the economy cannot keep on growing.
3. “Energy Return on Energy Invested.” It is the net energy that is available for society to use that is important.
In 1930, to get 100 barrels of oil it took the energy of one barrel.
In 1970, to get 30 barrels took one barrel.
Now, it’s 10 or 15-1 and decreasing.
Oil shale and tar sands are in the 5-1 range.
Biofuels is less than 2-1.
But geothermal is at least 10-1, and will last for 500,000 years.
It is estimated that we need 4-1 just to maintain our present society.
The net energy that is available for the use of society is getting gets less and less. In order to stay even, we will need more and more of the low EROI stuff just to stay even. Using geothermal to make electricity costs only half as much as oil.
With the world in recession, the oil price is at $100 per barrel. It seems like we are at the edge of starting down the backside of the oil supply curve. As oil supply starts to decrease, the net energy available decreases too but at an increasing rate.
One may reasonably assume that we are facing permanent recession or worse.
Another way of looking at it is: Net energy minus the energy it takes to get our food equals our lifestyle.
What can we do? The Big Island will be over the hot spot for 500,000 to a million years. The EROI for geothermal is stable and will stay the same for 500,000 years.
Consumer spending is two-thirds of our economy. Affordable energy is key. Let’s all work together to find the solution that works for the community, the environment and the economy.
Iceland is energy- and food-secure. They became that way by using low-cost hydroelectric and geothermal energy. They use their cheap electricity to make aluminum, and with the hard currency from that, they buy the food that they cannot grow. It can be done, but we must force the change!
At the early ASPO conferences, EROI used to be “fringe” thought, and now it is mainstream. We need to consider this in our planning!
We are at a pivotal moment in Hawai‘i’s history. Business as usual is no longer safe. Like the ancient leaders who made the decision to send the canoes up from the south, we are about to make decisions that will decide the future for coming generations.
We here in this room will make the commitment. If not now, when? If not here, where? If not us, who?
(Pacific Business News) Hamakua Springs Country Farms plans to use the streams along the Hamakua Coast to generate electricity as early as next year and has hired a system developer to move the process forward.
The idea has been in the works since last year, and Richard Ha, president of Hamakua Springs, said development of the hydropower system is likely to begin in 2012. The farm has received the proper permits, he said, but the cost and design analysis has not yet begun. He expects the evaluation and building process to take about seven months to a year. Read the rest
Richard told me, “We cannot wait to make our electric bill predictable and stable.”
We are coming to a fork in the road. Which way do we want to go?
If we stay on our present course, represented above by the blue line, electricity costs will keep on rising. The graph assumes a modest doubling of oil prices every 15 years, but it might be even more than double.
If we stay on the present path, we will have an increasingly difficult time paying our bills. Schools will pay more money for electricity, and less for education. Supermarkets will pay more for refrigeration, and farmers will get less for their produce. The hotel industry will be hit with higher electricity bills and fewer tourists. Small businesses will have a tougher time. More people will be homeless. And it will be the folks who can least afford it that will end up getting their lights turned off.
On the other hand, following the Ku‘oko‘a ala kai (path), where we use more geothermal as our primary base power, we can go to a place where we use all the renewable energy available to us and electricity costs stabilize. (See the red line above.) Our schools will be comfortable for our keiki to learn in. People will have more work opportunities and we will have fewer homeless people. Because our energy costs will be stable and reasonably priced, we can become competitive in many different areas of production. People will have more money in their pockets and so they will support local farmers, and more and younger farmers will start to grow things.
And because we helped each other to take this positive, renewable energy fork in the road, we will aloha each other.
In the uncertain future that is fast approaching, we will need to have stronger communities, we’ll need to make more friends and we will need to stay closer to our families. The Ku‘oko‘a path will lead us there.
Last week I was approached by some people whose vision is to levelize the cost of electricity so that residents statewide pay a rate similar to, or less than, what O‘ahu residents pay.
On O‘ahu, they pay around 26 cents per kilowatt hour (kwh) for electricity. Here on the Big Island, we pay about 36 cents/kwh.
These people see geothermal as the resource we have available that could take us largely off oil. And, unlike with oil, geothermal power costs are stable.
They explained that although the geothermal resource is on the Big Island, the largest number of customers are on O‘ahu. And that they would need to reach those O‘ahu customers in order to have enough people to pay for the cable and to lower the rates of Big Islanders.
With lower electric rates, they would hopefully attract a lot of folks to buy electric cars. This too would increase electricity sales, and help stabilize rates at a lower level.
They spoke about running a cable to Kaua‘i, as well, and powering Kaua‘i if the science permits. They know that’s probably a money loser. But they feel that it’s the right thing to do. How can we leave our brothers and sisters defenseless when oil price start to rise?
They asked me if I would join their group. For several years I’ve been working toward lower electricity rates for the rubbah slippah folks. And now, with Peak Oil right around the corner, it’s critical that we move quickly. I told them my intention is to join them after I spend some time evaluating things.
I like their general approach and there will be lots of details to fill in along the way. But it is certainly better for the rubbah slippah folks than the path we are heading down now.
The company’s year-to-date revenues, through September, show an even sharper decline of 17 percent, compared to last year.
Two months ago, the Hawaii Public Utilities Commission approved decoupling for the utility companies, severing the link between sales and profits — a matter that has been on the forefront of shareholders’ minds during the company’s last two investor calls.
Yes, but I wonder if the lower sales could also be due to folks leaving the grid to protect themselves from rising oil prices. When that happens, everybody else ends up paying more, and then we will begin dividing ourselves into the haves and the have nots. For ourselves and for future generations, we do not want this to happen.
Decoupling might protect the shareholders, but it does not give HECO any reason to be concerned about customers’ costs. It just allows them to do things like encourage expensive biofuels instead of bringing more geothermal on line.