Hawaii Renewables Encountering Cross-Currents and Headwinds

The state of Hawaii has a problem when it comes to supplying reasonably priced electricity to its citizens. Actually, it has a few different problems.

First, because there are no large rivers on the archipelago hydro power is not an option even though there is no lack of rainfall received at high elevations.

Second, because the islands are not joined by submarine transmission cables there is no ability to share either supply or demand.

Consequently, for reliable, base-load generation each of the major islands has one or more oil-fired steam generation plants. As you might expect, this is an expensive proposition costing upwards of $1.5 billion per year for fuel and resulting in average Hawaiian electricity rates that are almost triple those in the lower 48 states. The use of oil as the primary fuel for electricity generation also makes the residents of Hawaii amongst the highest per capita generators of CO2 in the country. Not exactly what you would expect from a state that is otherwise known for its stewardship of the environment.

But wait! The only thing a steam generator really needs is heat to boil water. The Big Island of Hawaii has active volcanoes which generate vast amounts of heat. Why not tap into that geothermal heat source to eliminate the need to burn fuel oil?

In fact, that is being done on a relatively small scale. The Puna geothermal facility on the Big Island began operations in 1993 providing 30 MW of electricity which was expanded to 38 MW in 2011. It now produces between 15% and 20% of the electricity for the Big Island. On February 28, 2013 the Hawaiian Electric Light Company (HELCO) issued a final request for proposals to add another 50 MW of geothermal generation.

That would seem to be a step in the right direction - but only a baby step. The Geothermal Energy Working Group concluded that the potential for geothermal on the Big Island is at least 500 MW. That would be enough to supply all of the electricity for the Big Island, Maui, and Molokai. And unlike solar and wind, geothermal has the ability to provide reliable base-load power indefinitely.

So why is it taking so long to develop a resource which has so many positive characteristics? Geothermal is reliable, renewable, and plentiful.

Well, to be honest, it's more complicated than it seems.

For one thing all of the facilities to generate electricity from oil are already in place, paid for many years ago. Electricity demand is slowly going down throughout the Hawaiian Islands as a result of conservation and energy efficiency measures. Homeowners are installing residential photo-voltaic which is further reducing demand during the day. Given that there is already too much supply it is somewhat difficult to argue for a very large capital expenditure in the short term to switch to geothermal.

Another issue is that lack of inter-connection between the islands. There have been a few different feasibility studies into laying a submarine electricity transmission cable and although some of the channels are quite deep and plagued by strong currents it seems technically possible. The cost, however, is a bit daunting –at least $1 billion.

But there is another significant problem that I certainly would never have thought of. Hawaii has a very large requirement for aviation gasoline, not only to refuel aircraft that have dropped off joyful tourists in the Aloha state but also to refuel aircraft that are stopping over in Hawaii only for that purpose. Of course Hawaii also needs automobile gasoline and lubricants so it makes the most sense to import crude oil and refine it into the different petroleum products locally. There are two oil refineries in Kapolei on the island of Oahu to do that.

One unpleasant fact about refining crude oil is that once you have separated out the more valuable products such as jet fuel, gasoline and motor oil you are left with a very dense and viscous product referred to as "residual oil". In Hawaiian refineries this residual oil makes up about 25% of the input crude by volume.

There's not much you can do with residual oil. But one thing you can do is burn it in electricity generating stations.

If you reduce or eliminate the burning of residual fuel oil you have to find something else to do with it. Not an easy thing to do when you are in the middle of the Pacific Ocean.

And finally, when building a large geothermal facility and associated high voltage submarine cable terminating on an island with a couple of active volcanoes, there is always the possibility that something bad might happen – something involving millions of tons of red-hot molten rock for example. However unlikely that may be, the consequences would be devastating if much of the Hawaiian electricity distribution system was dependent upon Big Island geothermal.

Taking everything into consideration it is no wonder that development of geothermal energy has been slow.

Utility scale wind is running into many of the same headwinds being faced by geothermal. The Big Wind proposal would see hundreds of wind turbines built on the islands of Molokai and Lanai with a total rated capacity of approximately 400 MW.

As with Big Island geothermal, this proposal would also require the laying of expensive submarine cables. However, unlike geothermal, wind is not a reliable base-load generation source and the actual average output of wind farms is typically only 20-30% of rated capacity.

The variability of this much wind generation would also be very problematic given the small size of the Hawaiian grid. So what is the optimal roadmap for the development of renewable energy in Hawaii? I believe that the time has come for a significant change in direction:

·         Abandon the Big Wind project. For the $2+ billion price tag of this project it would be possible to build Concentrated Solar Power (CSP) plants with Thermal Energy Storage on each of major islands; plants that can reliably produce electricity 7x24x365

·         Turn the CSP projects on Lanai and Molokai into true "Black Swans" by incorporating desalination capabilities into these plants. A reliable fresh water supply would open up new possibilities for agriculture and tourism on these relatively arid islands.

·         Continue to encourage the installation of residential PV but reduce the Feed-In-Tariffs (rate-payer subsidies) significantly over the next five years.  Too much PV will lead to instability in the grid and ratepayer/taxpayer subsidies are better directed towards geothermal and CSP projects.

·         Investigate new uses for the residual fuel oil that will no longer be needed including the potential to upgrade it to more valuable petrochemical products.

These initiatives will not happen quickly and there will be very significant capital costs. But in the end Hawaii could be a model for the rest of the world – a demonstration of how investments in overcoming significant obstacles can lead to a sustainable energy future and lower costs over time.

I have visited Hawaii 7 times in the last 25 years and have enjoyed the Aloha spirit on each and every trip. But it would be nice to turn on the air conditioning without having an image of an oil tanker pop into my head.




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