Powering Ahead – Green Energy vs Crude
by David Bowman
“Over all, rocks, wood, and water, brooded the spirit of repose, and the silent energy of nature stirred the soul to its inmost depths,” rhapsodized the landscape artist Thomas Cole in his 1835 “Essay on American Scenery.”
Of course, energy oscillates between nature and humankind and all points between. At the recent two-day Hawai’i Island Energy Roundtable, held at the Outrigger Waikoloa Hotel in rooms well-lit and ventilated by the harnessing of power, the energy of thought was stirring. Through slide shows and anecdotes, over coffee and pineapple, in language laced with jargon yet easily digestible, observations and predictions about the Big Island’s energy future were being made not in a spirit of repose, but of boldness.
It’s a future that’s exciting yet problematic, daunting yet achievable, playing out against the broader canvas of worldwide energy concerns. Since energy itself cannot be created or destroyed, but only transformed in the direction of entropy (so state the laws of thermodynamics), any discussion of Hawaii’s energy situation must necessarily intertwine with similar discussions elsewhere. If an oil tanker breaks up off the coast of Spain, if relaxed air-pollution rules allow for higher particulate emissions in New England, the inevitable repercussions ride the slicks and drafts to points distant. Everything is connected. Toxicity – not to mention supply and demand – knows no boundaries.
Information flowed like current at the Roundtable, which was sponsored by The Kohala Center, New Energy Partners and the Hawai’i Island Economic Development Board, with support from the County of Hawai’i. It was conducted as a community forum with E. Kyle Datta, president of the Kona-based consulting firm New Energy Partners, serving as facilitator. Participants found at their seats a handsome binder full of charts and graphs and distillations of policy, providing them a balanced view of the challenges and opportunities facing the Big Island. As the meeting progressed, former antagonists were able to hear each other’s perspectives and grasp the complexities of the issues at hand.
From the resulting collaboration, a consensus evolved around potential strategies for meeting the island’s energy needs reliably, with least cost and with minimal environmental impact, while keeping utilities financially strong – a “win-win” solution. For all of its arcana – one speaker joked about how energy lectures can be a cure for insomnia – the first day went briskly. Plenty has been written and said about the new energy consciousness. In a recent Los Angeles Times Op-Ed piece, actor and activist Robert Redford, long involved with solar-energy issues, ended with this clarion call: “Weaning our nation from fossil fuels should be understood as the most patriotic policy to which we can commit ourselves.” Numerous articles in a range of journals have criticized the administration’s energy and environmental directives. Folders and brochures brimming with information, produced by governments, businesses and private citizens alike, tout the benefits of an oil-free future. Some deal with supply, some with demand, others with pricing; still others talk about generation and transmission, reliability and cleanliness. And, of course, philosophy. It’s a huge realm, full of variables.
One could appreciate, hearing the Roundtable panelists and viewing their data, that the state of Hawai’i, and especially the Big Island, is an important player in the global energy game. Because of its remoteness and diversity, fragile ecology and lack of a fossil-fuel base, and because of its investment in renewable resources – listen closely to that wind outside your room – Hawai’i Island is among the leading incubators of alternative-energy technologies. And if it sometimes appears as though we’re still hopelessly wedded to petroleum products (the Bush administration’s oil-and-gas orientation, even as it pays lip service to alternative fuels, does not provide any reason for optimism), the long-term writing is on the wall. As Amory Lovins’ remarkable book “Natural Capitalism: Creating the Next Industrial Revolution” clearly attests, we are steadily and inexorably moving away from the dirty world of crude to the clean world of green. It is merely a matter of time – and resolve.
Not a lecture, a dialogue
“This roundtable is different from other roundtables,” said Datta in his welcoming remarks. “It’s not a lecture, but a dialogue.” Datta, along with fellow Roundtable panelist Joel Swisher, is one of the co-authors of the book “Small is Profitable: The Hidden Economic Benefits of Making Electrical Resources the Right Size”; the two of them helped craft a Viewpoint article on that very subject for this newspaper (HIJ, Nov. 16-30). Not only did Datta and Swisher play a large role at the Roundtable – they each moderated a panel discussion, and helped summarize the findings from Saturday’s wrap-up sessions – but two days later followed up with a free lecture on distributed energy at Keauhou Beach Resort. Fifty people showed up on a Monday night to hear them, which suggests that their message, touching as it does on such an integral part of daily life, really does hold currency.
The day’s first presenter, Karl Stahlkopf, senior vice president for energy solutions and chief technology officer for Hawaiian Electric Co. (HECO), was also keen on discourse: “Let’s make this a dialogue, not a monologue.” And so it began. Stahlkopf identified four challenges facing Hawai’i: keeping electricity costs competitive (Hawai’i has the highest costs in the nation), reducing dependence on imported oil (93 percent of the state’s energy is produced by hydrocarbons), managing environmental impact (energy’s “footprint”), and enhancing reliability to facilitate a digital economy (Oahu, he pointed out, already has a 51 percent Internet penetration).
All generation options, Stahlkopf said, leave Hawai’i with high energy costs; the best way to keep the state cost-competitive is to reduce its energy intensity through conservation, demand-side management (DSM), combined heat and power (CHP) and real-time pricing. In the short term, at least, reducing fossil-fuel use, while addressing the problem of CO2 emissions and global warming, could actually increase electricity costs under the state’s current regulatory polices.
“There is no one ‘silver bullet’ here in Hawai’i,” Stahlkopf said. “The challenges (economics, ecology, land use, technology) all conflict with each other. What we need to do is lower our energy intensity.” His short-term solutions: reducing that intensity through conservation, DSM and CHP; increasing the renewables portfolio (solar, wind, geothermal, biomass, et al); increasing support for renewables research, including hydrogen and fuel cells; and beginning the permit process for a new thermal plant on O’ahu. Farther out, he said, these strategies will be adjusted as circumstances warrant. (HECO is involved with two ambitious projects: the proposed Hydrogen Power Park, possibly to be located at the Natural Energy Laboratory of Hawai’i Authority (NELHA), and the Hawai’i Fuel Cell Test Facility at Kaka’ako.) Long-term, Stahlkopf wrote in the Roundtable binder, “our environment will dictate that preference be given to renewable resources and conservation as the generation option of choice for new capacity addition.
“ The next panelist, Curtis Beck, customer-service manager at Hawai’i Electric Light Co. (HELCO), gave an overview of the utility’s history (it started as three separate franchises, dating to 1894), discussed its system operations (rates, supply/delivery, customer base, peak hours, service territory, etc.) and outlined what it will need to do to meet Hawai’i Island’s future electricity needs (central station plants, distributed generation (DG), renewable sources, load management). Of immediate concern, he said, is resuming construction on the CT-4 and CT-5 combustion turbines at the controversial Keahole generating plant, where work has been suspended pending legal appeals.
Beck, an engineer, was asked when the Big Island’s system will reach the breaking point. “We won’t let it,” he said, laughing. “We’re almost there, though. We need more capacity on-line. It will be a diverse mix of resources that keeps us going.” The system’s aging infrastructure, he pointed out, is vulnerable to disruption from a variety of things: distance, wind, rain, trees, geckos, termites – even Mauna Loa erupting, as inconceivable as that may seem.
According to Datta, three fundamental technical challenges confront the Big Island’s power system. First, there is an energy imbalance in West Hawai’i; most of the island’s demand is on the west side, yet only a fraction of its 290 megawatts of generation is situated in Kona. That’s a shortfall growing with every new house, which must be met by power transmitted from East Hawai’i. Second, the island’s far-flung distribution system cannot always meet this demand, raising the specter of reliability problems. The third challenge is how to incorporate a larger mix of intermittent and distributed resources that are outside the utility’s control. As if to accentuate these concerns, a major outage, caused by an independent generator tripping off-line, hit the Big Island the day of the conference.
After a break, Garry Brewer, the Frederick K. Weyerhaueser professor of resource policy and management at Yale University, moderated the panel session “Policy Options for a New Regulatory Compact.” Its focus: to alter the regulatory playing field to provide all energy companies with financial incentives to develop the most efficient and sustainable energy system. Brewer was emphatic in stressing the need for partnership: “How can we think about a world that isn’t predictable in energy matters? This isn’t command and control anymore. The public often doesn’t know what we’re doing. Open and transparent is a better way to behave. Public, private and nonprofit entities have to be more transparent. The bottom line, and I can’t state it more firmly, is that we’re all in this together.
“ Richard Cowart, a regulatory expert who heads the Vermont-based Regulatory Assistance Project, noted the kinship between his small New England state and faraway Hawai’i. “We have more in common with Hawai’i than you’d think. In Vermont we have a love of the land, tough environmental challenges. We’re looking to improve our energy policies, preserving what’s best, and growing our economy.” (Another thing the states have in common: a ban on billboards, which exact their own cost in energy and aesthetics.)
What consumers and citizens really want, Cowart said, is reliable electrical service and stable, affordable bills. The challenge is to empower customers through distributed resources (e.g., efficiency, co-generation, renewables) while retaining sustainable profit margins for utilities. The critical problem, under current regulations, is that utilities profit by selling more power and have a strong financial disincentive to allow distributed resources on the market. In the Roundtable binder, Cowart wrote: “Regulators should consider policies that break the link between sales and profitability (so-called ‘decoupling’). Performance-based revenue caps (not the same as price caps) are a promising approach for breaking the sales-profitability link. They reward a firm for increases in efficiency, while making them indifferent to the volume of throughput over their wires.”
“Hawai’i is in a good position,” Cowart told the Roundtable, “to learn from the Mainland’s mistakes.”
Energy of Nature
The energy of nature was present here, and not silently. Monty Richards Jr., president of Kahua Ranch Ltd., whose Big Island roots go back several generations, spoke forcefully of the need for renewables, which, though environmentally friendly, are either expensive (biomass, geothermal), intermittent (solar, wind, hydro) or both. “Quite a few of us are in alternative energy,” he said. “Financing is tough. A lot of wind farms are ready to go. We need to change the paradigm and solve the technical problems. Renewables seem to be used here when it’s convenient.
“New things are involved, hydrogen, fuel cells and the like. Can we produce power by alternative means? Yes. The knowledge and equipment are here. The money is not here, but it’s coming.”
Hermina Morita, a member of the state House of Representatives, offered a governmental perspective. “Don’t do stupid things that hinder innovation,” she said. “Do sensible things that reward the development and adaptation of technologies that enhance, rather than degrade, the environment. In general, Hawai’i has sound energy policies, but implementation has been slow. The state must put its energy future under its own control, apart from international energy markets. Concerns need to be addressed in the context of Hawai’i's geographic isolation. ”Self-sufficiency and energy independence are difficult to achieve with barriers in place. We can’t get to the basis of hydrogen and fuel cells unless we address regulatory concerns.” Added Cowart: “Combined heat and power is one of the prime things Hawai’i should be looking for. You can’t just wave a magic wand and have it.”
Kona businessman Kelly Greenwell, whose family, like Richards’, has been in the islands for many years, reminded the conference of the essential Hawai’i: “Aesthetics is the reason people come here. We have to get our lines underground. We need to restore our agriculture – not just the food we eat, but the flowers we make, the golf courses we play on.” Indeed, though Hawaiian agriculture is no longer the economic force it once was, panelists agreed it will play a vital role in future power production.