Tag Archives: HELCO

Geothermal, Renewable Energy Sources

What the Geothermal Working Group Found

Advantages of geothermal:

  • It is an indigenous resource
  • It generates revenue for the state
  • It generates community benefits
  • It provides stable power
  • It is less than half the cost of any of the renewable energy alternatives.
  • The Big Island will be over the geothermal “hot spot” for 500,000 to 1 million years

I want to share some highlights of the Geothermal Working Group’s final report.

Page 10, Revenues derives from geothermal:

Screen shot 2012-01-11 at 8.47.26 AM

Page 12:

IV. Recommended Steps for Hawaii State Legislators

– Make the allocation of geothermal royalties more transparent to show how benefits come back to the community. Designate the records of the allocations to be public domain.

– Establish a community advisory board to offer suggestions to the DLNR about how royalties generated by geothermal power plants are spent. The advisory board should be members of the communities that host existing or future geothermal power plants and/or those who are most impacted by the development of geothermal energy.

– Encourage the DLNR to use geothermal royalties to identify promising geothermal sites and to further develop the resource.

– In light of the probability that oil will reach $200 per barrel (Lloyds of London), the legislature is requested to commission a study to show the economic impact of various prices of oil.

– Facilitate development of geothermal with a critical review of the geothermal permitting process, regulatory capabilities, and possible investment incentives.

Page 5:

The Geothermal Working Group’s principal findings

– Geothermal is a renewable resource indigenous to the island of Hawaii that is dissociated from the price volatility of petroleum fuels.

– Geothermal can be a key component in a diversified energy portfolio for Hawaii County, both for the electrical grid and for transportation.

– In Hawaii, geothermal is a firm-energy resource at lower cost than fossil fuel. – Developing multiple geothermal plants is the most prudent approach.

– Geothermal has the potential to supply baseload electricity; long term reliability and the ability to supply grid management services (currently supplied by conventional fossil-fueled power plants) must be demonstrated in order to consider geothermal as the primary energy resource.

– With geothermal power plants, agricultural fertilizers, hydrogen, oxygen, and business-enterprise power can be produced for off-peak rates during the hours of curtailed electrical demand.

Page 9:

Overview

Geothermal energy can be developed to become the cheapest form of baseload power for Hawaii County. There are no importation or storage costs. Using geothermal as the primary source of baseload power will permit the county’s businesses to be more competitive with the rest of the world. Using geothermal as the primary source of baseload power will also help folks on the lowest rungs of the economic ladder—those who struggle with the cost of services.

In addition to stability and affordability, geothermal can leave less of an environmental impact than the commercially-available baseload power sources of electricity. There are no greenhouse gases, emissions and no oil spill risks.

The lower rates of off-peak geothermal electricity encourage the production of ammonia locally. Ammonia is an efficient hydrogen carrier that can be used to power internal combustion engines and as an aid to local agriculture as fertilizer. Light-industry business parks constructed near geothermal energy plants can use excess heat as a resource for heating vegetable and tropical flower hothouses, drying wood, and drying fish.

Benefits of geothermal energy to the community include sharing in geothermal royalties. In accordance with state law, the geothermal royalties are paid directly to the Department of Land and Natural Resources who allocate the royalties in three ways:

1. Department of Land and Natural Resources receives 50% 2. County of Hawaii receives 30% 3. Office of Hawaiian Affairs (OHA) receives 20%

Potential adverse impacts are listed below:

– Interference with worship of the Goddess Pele – Interference with certain Native Hawaiian practices – Rainforest destruction – Possible health and safety impacts – Disruption of the way of life for nearby residents – Hydrogen sulfide and other air quality issues – Noise – Increased strain on an inadequate infrastructure – Impact on native fauna and flora

Peak Oil

Oahu’s Electricity Rates Surpass Other Islands

It used to be that the avoided cost (the part of your electricity bill that is due to oil) was higher on the other islands than on O‘ahu. This Hawaiian Electric (HECO) chart shows the rate on different islands back to 2008.

This past October, though, the avoided cost on O‘ahu, Maui and Hawai‘i Island was roughly the same, at approximately 15 cents per kwhr.

Now, O‘ahu’s avoided cost has about doubled. It’s 29 cents per kwhr now, and actually higher than on the other islands.

This is more proof of what has been clear to me since 2007, when I attended my first Peak Oil conference – that oil prices were going to just keep rising.

Avoided costs for January 2012: 

HECO (O‘ahu)

On Peak 29.167 cents per kwhr

Off Peak 19.060 cents per kwhr

HELCO (Big Island)

On Peak 21.656 cents per kwhr

Off Peak 17.656 cents per kwhr

MECO (Maui)

On Peak 20.240 cents per kwhr

Off Peak 19.194 cents per kwhr

MECO (Lana‘i)

On Peak 34.621 cents per kwhr

Off Peak 29.057 cents per kwhr

MECO (Moloka‘i)

On Peak 29.428 cents per kwhr

Off Peak 26.580 cents per kwhr

Geothermal, Peak Oil

Democratic Party Resolution Supports Geothermal for Baseload Electrical Power

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The following is a resolution that the Hawaii County Democratic Party adopted at its 2011 County Convention. It recognizes the value of geothermal as an indigenous resource, and it recognizes that low cost is a relevant and important aspect that benefits society.

It also notes that the EPA has directed the HECO companies to retrofit its oil-fired plants to comply with emission standards. But that will cause oil-fired plants to stay in operation longer than desirable, and will result in higher cost to ratepayers.

Note especially this:

“NOW THEREFORE BE IT RESOLVED THAT the Hawai‘i County Committee of the Democratic Party of Hawai‘i hereby formally requests the 2012 Hawai‘i State Legislature to direct the Public Utilities Commission to require HELCO to develop a timely plan to retire its fully depreciated fossil fuel power generation facilities and accept geothermally generated electrical power as the primary baseload source. HELCO should continue to include other alternative energy sources – such as wind, solar and hydro – in its mix of sources, but geothermally generated electricity must become the primary baseload source for Hawai‘i Island within the next five years; and

FURTHER BE IT RESOLVED THAT the PUC should continue to implement contractual procedures between HELCO and geothermal power producers that represent an equitable return on investment but, as important, reduce the kilowatt hour cost to consumers whenever possible.”

The Resolution:

Requesting the 2012 Legislature to Mandate PUC to Require HELCO to Develop A Timely Action Plan To Retire All Depreciated Oil-Fired Power Plants on Hawai’i Island And Transition to Geothermally Generated Electricity As the Island’s Primary Baseload Power Source

WHEREAS, the Hawai‘i County Democratic Party adopted a resolution at its 2011 County Convention supporting the use of indigenous, renewable geothermal energy to generate baseload electrical power to (1) reduce dependency of imported fossil fuels, (2) reduce our carbon footprint and other environmental risks, and (3) hold the line or reduce electrical energy costs to consumers; and

WHEREAS, Puna Geothermal Venture has proven the safety and reliability of geothermally generated electrical power for Hawai‘i Island consumers for about 18 years; and

WHEREAS, this geothermal power has also generated royalty payments to the State and County of Hawai‘i and the Office of Hawaiian Affairs running in the millions of dollars over the past 18 years; and

WHEREAS, the Public Utilities Commission has in the past year initiated new contractual procedures between HELCO and PGV which are successfully reducing the kilowatt hour cost of geothermally generated power to consumers; and

WHEREAS, all but one of HELCO’s existing fossil fuel-dependent power generation facilities on Hawai‘i Island are fully depreciated but continue to be operated, which has destructive environmental and economic consequences, including forcing Hawai‘i Island consumers to pay the highest kilowatt hour charge in the state – a cost that will continue to increase as the global peak oil situation further drives up the cost of fossil fuel;

WHEREAS, the federal Environmental Protection Agency has recently directed all HEI companies including HELCO to retrofit existing oil fired plants to comply with EPA emission standards. This expensive undertaking will force continued usage of these plants and perpetuate a level of emissions and kilowatt hour costs that exceed that of geothermal. Also, this investment – which will inevitably be borne by consumers – should, instead, be dedicated to the transition to environmentally and economically preferred geothermal power production and/or distribution;

NOW THEREFORE BE IT RESOLVED THAT the Hawai‘i County Committee of the Democratic Party of Hawai‘i hereby formally requests the 2012 Hawai‘i State Legislature to direct the Public Utilities Commission to require HELCO to develop a timely plan to retire its fully depreciated fossil fuel power generation facilities and accept geothermally generated electrical power as the primary baseload source. HELCO should continue to include other alternative energy sources – such as wind, solar and hydro – in its mix of sources, but geothermally generated electricity must become the primary baseload source for Hawai‘i Island within the next five years; and

FURTHER BE IT RESOLVED THAT the PUC should continue to implement contractual procedures between HELCO and geothermal power producers that represent an equitable return on investment but, as important, reduce the kilowatt hour cost to consumers whenever possible.

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Geothermal, Peak Oil, Sustainability

A Quandary At HELCO

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HELCO issued a Request For Information re: geothermal energy this week.

Although in my opinion Hawaiians are overwhelmingly in favor of geothermal, I am finding, as I ask around, that people are conflicted about HELCO’s intentions.

Hawaiian Electric Company (HECO), the parent company that owns Hawaii Electric Light Company (the Big Island’s HELCO) and the Maui Electric Company (MECO), readily acknowledges that it has a duty to protect the interest of its stockholders.

And when the interests of the stockholders and the interests of the people are in conflict, HECO’s loyalty lies with the stockholders.

That is at the heart of the problems they are having on Moloka‘i and Lana‘i. And it’s at the heart of the problems they deal with when facing the unprecedented future of rising oil prices.

Passing the cost and risk of Peak Oil, as a result of decoupling, straight through to the rate payers – the public – is not comforting to the people.

We need a new model here, one that lines up the needs of the people with the needs of the utility. We need a new model that transforms the utility into an economic driver, rather than an economic impediment. A new model that focuses on a better life for future generations.

People are very uncomfortable with the prospect of handing over, to future generations, a diminished life compared to what they had. We must do better.

There are a thousand reasons why no can. We need to find the one reason why CAN!

Geothermal

New HELCO/PGV Contract For Geothermal

Puna Geothermal Venture (PGV) and the Hawaiian Electric Light Company (HELCO) have come to an agreement for PGV to provide an additional 8 MW of power to HELCO’s grid. I hope the PUC approves this expeditiously. Read about the agreement here.

PGV has two previous contracts:

  • One for 25 MW. This is an existing, “avoided cost” contract. In February, that avoided cost was approximately 16.75 cents/KW at Peak time.
  • Another for between 25 and 30 MW, which was also an existing, avoided cost contract. PGV agreed to change this to a fixed cost contract at the lower rate of 11.8 cents/kWh.

Both have a 1.5 percent escalator per year.

The new 8 MW addition is at 9 cents/kWh for the first 30,000 MWH/year, then 6 cents per MWH per year for anything greater than 30,000 MW.

Although the addition is 8 MW, PGV renegotiated one of its existing avoided cost contracts to a fixed cost contract. This results in a significant lowering of the 5 MW avoided cost contract from approximately 16.75 cents avoided cost in February to 11.8 cents fixed.

This new contract is significant because it is more than just a base power contract. Sixteen (16) MW of the geothermal-generated electricity is dispatchable from HELCO’s base station in Hilo. When this has been in operation awhile and proves to be dependable, it can replace petroleum-fired units with the same characteristics.

Geothermal is the only non-liquid-fueled power generation facility that can provide dispatchable power. This means we will have the ability to get off oil and biofuels.