Powering Paradise

A decade of project development for Honua Ola Bioenergy, formerly known as Hu Honua, on the big island of Hawaii nears completion.
By Ron Kotrba | March 06, 2018

World-class beaches, waterfalls, palm trees and tropical canopies, luaus, vacation resorts and memories to last a lifetime—these clichéd images of Hawaii may arise when mainlanders envision trips to the paradise archipelago encircled by the vast Pacific Ocean, but exactly how to power this paradise of dreams is likely a thought little explored by most visitors.

Hawaii’s economy is rather diverse, according to the Department of Business, Economic Development and Tourism, but as one might expect, the No. 1 industry in Hawaii is tourism. To keep the wheels of tourism turning, and to protect its natural beauty, Hawaii must reduce its dependence on imported oil.

The state’s major utilities consist of Hawaiian Electric Company Inc. (HECO) and subsidiaries Maui Electric and Hawaii Electric Light (HELCO), which provide electricity to 95 percent of Hawaii’s people—every populated island except Kauai, says Peter Rosegg, Hawaiian Electric senior spokesman.

“Hawaiian Electric has been a leader in renewable energy since the 1970s when we installed some of the first modern wind turbines in demonstration projects funded by the federal government,” Rosegg tells Biomass Magazine. “And 10 years ago, the Hawaiian Electric Companies joined the state of Hawaii and the U.S. DOE in creating the Hawaii Clean Energy Initiative.” The partnership brings together business leaders, policymakers and residents committed to energy independence. According to HCEI, which is celebrating its 10th anniversary this year, Hawaii is the most fossil fuel-dependent state in the nation.

Rosegg says when the initiative was launched, renewable energy used by Hawaiian Electric Companies’ customers was about 8 percent. “Today, it is 27 percent,” he says. “Our [Renewable Portfolio Standard] mandate for electricity is 30 percent by 2020, 40 percent by 2040, 70 percent by 2040 and 100 percent by 2045.” Rosegg says the utility has a Power Supply Improvement Plan that lays out a five-year action plan and long-term roadmap to reach this goal.

The utility and state take an all-of-the-above approach to renewables, Rosegg says, adding that Hawaii has multiple renewable resources that can be used to create electricity—wind, sun, geothermal, ocean, some run-of-river hydro, and waste streams. “They all have values and uses,” he says. “After decades of reliance on fossil fuels and oil in particular, we want a portfolio of renewable resources.”

Biomass technologies—including direct burn, waste to energy, and biofuels—have a healthy stake in that portfolio. “We have a strong biomass tradition that goes back to the days when sugar was king in Hawaii and biomass from dozens of sugar mills was used to create electricity,” Rosegg says. “Today, much of that sugar and pineapple land is fallow, and could be used for energy crops. We supported research into biofuel crops that could be grown locally, and we tested our baseload generators that use low-sulfur fuel oil to see how large a percentage of biofuel could be blended without losing heat rate and capacity. We support a plan, unfortunately rejected by regulators as too expensive at the time, for a project on Hawaii Island called ‘Aina Koa Pono,’ which proposed to grow fuel crops on fallow sugarcane land and create electricity by high-tech methods. We have cooperated with a number of other efforts to promote biofuel crops as part of agricultural diversification and greater food self-sufficiency.”

On Oahu, the Hawaiian Electric Companies buy power from a waste-to-energy plant operated by Covanta for the city and county of Honolulu. They also own and operate the 110-MW Campbell Industrial Park generating station, which is powered by biodiesel. “And we operate an 8-MW emergency generation fuel facility owned by the state department of transportation airport division that is fired with biofuel,” Rosegg says, “and we are constructing and will operate the 50-MW Schofield Barracks generating station that will use a 50/50 blend of biodiesel and diesel.” He adds that most of the biodiesel to run these facilities comes from Pacific Biodiesel, a Hawaii-based biodiesel producer that uses locally grown crops and waste oil collected as feedstock, but the utility also has a supply agreement with Renewable Energy Group Inc., the largest North American biodiesel producer based in Iowa with 11 active U.S. plants whose annual production capacity nears half-a-billion gallons.

“The Hawaiian Electric Companies have to be at the center of any effort to reduce our dependence on imported oil, reduce our energy emissions and use the most renewable energy possible,” Rosegg says. “Hawaiian Electric Companies envision biomass and biofuel to be significant parts of our energy mix well into the future. Reaching our 100 percent renewable energy goal will require attracting companies to invest in renewable energy projects throughout the islands.” One such investment project is nearing completion after a decade of developmental struggles.

Living Earth
Construction continues at a fast clip in Pepeekeo on the big island of Hawaii for Honua Ola Bioenergy—formerly Hu Honua Bioenergy—a 30-MW biomass power plant project that has roved through a series of setbacks and achievements over the past 10 years. In 2010, the organization got its first air permit hearing on the docket. The air permit to retrofit an old sugar mill power plant, run on coal after sugar operations ceased, was granted the following year. That same year, Hu Honua was removed from a lawsuit in which the plaintiffs bought land near the site under the alleged promises or misrepresentations by the former plant owner and realtor that the facility would never operate again. Later that year, site work began, and in 2012, Hawaii Electric Light signed a power purchase agreement (PPA). On March 1, 2016, that PPA was canceled by the utility after $137 million was already spent completing roughly 50 percent of the construction and retrofitting work. Later that year, a lawsuit was filed by Hu Honua regarding the PPA termination. Then, in May 2017, Hu Honua and HELCO came to terms on a new PPA that was approved two months later by the Public Utilities Commission. As a result of this new agreement, construction restarted last summer and is in full swing. The owners expect operations to commence late this year.

“As our project enters a new phase, we decided to bestow upon it a new name,” says Warren Lee, the new president of Honua Ola Bioenergy. Lee, a retired lieutenant colonel from the U.S. Army Reserve who served 26 years, began his career at Hawaiian Electric Company where he worked in engineering and production for two decades. He then took on an executive role with Hawaii Electric Light—the electric utility for the Island of Hawaii—and served as president of HELCO for 18 years. Next Lee joined the public sector, where he completed two four-year terms as Hawaii County director of public works. In late 2017, he joined the Hu Honua Bioenergy team as president.

“Honua Ola means ‘living earth’ and represents the symbiotic cycle of what the earth gives us,” Lee tells Biomass Magazine. “The earth provides trees that Honua Ola will turn into energy to power our daily lives. As we replant the trees, we keep the cycle balanced. We give back what the living earth gives us, and in the process we also give back to our community with jobs and ancillary opportunities.” Lee says Hu Honua, which means “to spring forth from the earth,” was a fitting name during project development of the biomass facility. “But as we look forward to 30 years of providing energy to Hawaii Island,” he says, “we have chosen a name that better represents the sustainability inherent in the Honua Ola method of producing power.”

Five guiding principles motivate the Honua Ola team. “The current ownership assembled a team built around the guiding principles of the project,” Lee says. “One, ratepayers come first. Two, jobs, jobs, jobs, as we help create 190 permanent jobs on the island. Three, producing 100 percent renewable energy. Four, jumpstarting a forestry industry on Hawaii Island. And five, being a good neighbor and an integral part of our community.”

Lee says through cycles of achievements and setbacks over the years, the vision of the project has not changed. “The ownership has changed for various reasons,” he says. After bouts of project turmoil, including cancelation of a previously approved contract with HELCO, a highly focused agenda emerged: To reestablish the PPA, get approval from the PUC, and complete construction of the plant by the end of 2018. “Two of those three things have been accomplished,” Lee says, “and we are well on our way to completing construction.” Previous setbacks in construction led to cancelation of the original PPA, and a subsequent lawsuit. “The lawsuit was a dispute over the way in which the original PPA was terminated,” Lee explains. “However, the establishment of a new PPA and the progress toward a fully functional plant has put that lawsuit to the side. We are very pleased to be working closely with the utility to bring renewable energy to Hawaii Island without having to handle our disputes in court.” 

For an independent power producer like Honua Ola, a PUC-approved PPA is mandatory. “Our plant is on an island,” Lee says. “There is only one electric utility on the island, so therefore, we have only one customer to whom we could sell the power we produce. Our PPA is our contract to sell electricity to HELCO. Given that the utility is regulated, the PUC approval is the state government’s approval that the contract is fair to both companies and—most importantly—to HELCO customers.”

Since the PPA had previously been approved by the PUC, the commission determined the procedural schedule for the reapproval could be accomplished in an expedited manner, allowing both parties to come to a resolution with minimal time wasted. “It worked and was a superb example of efficient government processes,” Lee says. “We are now focused on building the plant that will generate up to 30 MW of electricity for HELCO customers. All other details between HELCO and Honua Ola have been worked out, and we’re working together to make this project a reality.” Honua Ola will provide base-loaded power on demand to the HELCO grid in return for a fixed capacity payment. Energy payments are based on dispatch, Lee says. 

The expedited procedural schedule will help Honua Ola complete construction, connect to the grid and begin operations by the end of this year, which is vital to qualify for the federal investment tax credit for renewable energy—only intensifying the urgency to finish the project. “The tax credit is a federal incentive specific to biomass power plants,” Lee says. “Honua Ola will qualify for this incentive if the plant is complete and connected to the utility by end of 2018.”

East Hawaii Island, where the plant is located, was once a center for the sugar industry, with thousands of acres planted with sugarcane. “As the sugar industry went by the wayside, the state, county and local landowners decided to replant some of this agricultural land with eucalyptus trees in the hopes of establishing a vibrant forestry industry for the island,” Lee says. “For two decades, many of these stands of trees have been untouched, despite being at maturity. As a species, eucalyptus is ideal for biomass feedstock—especially in Hawaii. In our climate, these trees grow straight and tall and reach harvestable size in approximately seven years. They are also an efficient choice for combustion at the plant.”

Lee says depending on utility demand, Honua Ola will harvest approximately 2,000 acres a year and will work with its wood suppliers and forest managers to replant as many acres as it harvests. “We will be able to process whole trees or slash—the leftovers from other forest-harvesting businesses,” he says. “We recognize that both options help to jumpstart the forestry industry on the island. Alone, Honua Ola expects to create 70 full-time jobs in forestry. Ideally, we’d like to see other new entrants into the forestry industry as well, creating more jobs and allowing our plant to symbiotically process the leftover materials and use it to generate power.” 

Chipped or whole log eucalyptus feedstock will be delivered to Honua Ola. General Manager Kevin Owen says the logs will be staged in a storage yard until they are processed through the Morbark chipper that will produce 2”x2”x3/8” wood chips. “Both the processed and purchased chips will be conveyed to the chip storage building that houses about 5,600 tons of chips,” Owen tells Biomass Magazine. “From the chip storage building, the metered chips will be conveyed to the boiler building for the final step before combustion. With decades of experience in wood handling equipment, Process Barron has engineered and supplied a solid and reliable wood handling system.”

A Babcock & Wilcox boiler at the facility was originally designed for sugarcane bagasse and then converted to coal years later. Owen says Honua Ola hired ESI Inc. of Tennesee to retrofit the boiler for use with 100 percent woody biomass that will fire up on biodiesel, and switch to 100 percent wood fuel. The boiler, rated at 300 kilopascals per hour and 1,250 pounds per square inch, will supply steam to the newly purchased turbine generator manufactured by Shin Nippon Machinery Co. Ltd. “The generators export power to the island’s grid and will supply up to 30 MW, 21.5 MW of which are committed, and a minimum of 10 MW during periods of low demand,” Owen says. “The exportation of power was designed by Power Engineers and ACSI to deliver 13.8 kilovolts (KV) of power via an underground duct bank to the step-up transformer, at which it is exported at 69 KV to the HELCO grid.”

The emissions control system was also designed by ESI Inc. of Tennesee to provide the best available technology (BAT) and achieve the lowest emissions possible. Gas will flow from the boiler and through a dust collector, then an electrostatic precipitator supplied by PPC Industries, followed by a selective catalytic reduction system and finally a bag house before exiting the 140-foot stack, Owen says.

These systems help minimize particulate matter, nitrogen oxide and carbon monoxide emissions. The effluent will be monitored through a Trace Environmental Systems continuous emissions monitoring system.

Finish Line in Sight
The primary challenges of this project are formidable, as Lee suggests, but given the hurdles already overcome throughout the past decade, they are by no means insurmountable. To put them succinctly, these challenges are completing construction on time and budget, and meeting the PPA requirements. Were it not for a close working relationship with the Hawaiian Electric Companies, federal incentives, and the oversight and support of the state and county of Hawaii, this project named after the living earth might have very well died on the vine.

“Federal and state tax credits and other financial incentives obviously work for investors who wish to undertake a capital-intensive venture in renewable energy,” Lee says. “Additionally, the state of Hawaii has already taken a major step toward expediting these projects by setting strict renewable standards with a dedicated timeline. Elected officials, in particular, have played an outsized role expressing their constituents’ overwhelming desire to have a renewable source of energy to replace fossil fuel-burning plants.” This is, of course, in accordance with the state’s goal to be 100 percent renewable by 2045—“a goal that we are proud to help advance,” Lee adds. He also expresses gratitude for the labor unions. “They helped us build a capable workforce made up of local laborers and technical experts to build the plant.” 

The success of this project translates to increased base-loaded renewable energy to the HELCO grid, stable electricity pricing, economic growth for the forest industry and the community. “This project is important for Hawaii in many ways,” Lee says. “For sustainability, Honua Ola is providing 30 MW of 100 percent renewable energy to help the state meet its goals. For the local economy, the plant and the related activities will create 190 permanent jobs statewide. For the Hamakua Coast—where the plant is located—Honua Ola will jumpstart a long-stagnant forestry industry. For local utility customers, Honua Ola will lower electrical bills. And as a good neighbor, Honua Ola will play a strong social responsibility role for our community and neighbors.”

Author: Ron Kotrba
Senior Editor, Biomass Magazine