Aloha Biomass

Hawaii strives to stabilize its energy prices with renewables
By Anna Simet | July 03, 2012

Hawaii currently supplies about 90 percent of  its energy with imported oil at a cost of about $7 billion spent outside the state’s economy. This makes Hawaii the most oil-dependent state in the U.S. The state is taking some major initiatives to try to change that.

That includes S.B. 2785, which has passed the Hawaii House and Senate and is now awaiting the governor’s signature. Once signed, the bill will allow for an inter-island undersea cable system that would connect the islands with power and high speed broadband. Right now, Hawaii has six relatively small and separate electric grids, which do not have neighboring grids to draw power from as do mainland utilities. The islands are already connected with many telecom cables, but no power cables.
Unfortunately for Hawaiian ratepayers, when the price of oil skyrockets, so do electricity prices.

However, backers of S.B. 2785 believe that connecting the islands would allow the state to use more of its own renewable resources at fixed, predictable prices that won't be tied to the price of foreign oil.
Based on similar cables elsewhere, Hawaiian energy officials project the cost to deliver power via an 80- to 100-mile cable to be less than 10 cents per kilowatt-hour (kWh) at 40 percent capacity. At a higher capacity, it drops below 7 cents per kWh. With low sulfur fuel oil at $135 per barrel, the cost of just the oil burned in oil-fired generators is 24 cents per kWh, according to the Hawaii State Energy Office.

While investors and private developers would pay for the upfront costs, ratepayers would have to pay generation and transmission costs, but they would no longer have to deal with drastically fluctuating electricity rates.

There is no question of whether the project will work, as similar projects have been successfully implemented in other locations, including the Baltic Cable that connects Germany and Sweden, which spans 155 miles and has a 500 MW capacity. In order for this whole scenario to effectively play out, however, the state’s renewable energy industry needs to grow in a big way, and it seems as though it’s on the right track.

There are currently more than 20 biomass or biofuel projects in planning stages or under development on the islands, and they will use feedstocks such as algae, eucalyptus and municipal solid waste to produce products from biodiesel to renewable gasoline and jet fuel to renewable energy.

Under development in Pepe'ekeo on the Hamakua Coast of Hawaii, Hū Honua Bioenergy has scored a 20-year, 21.5 MW power purchase agreement (PPA) with Hawaii Electric Light Co., and now just needs approval of the PPA by the Hawaii Public Utilities Commission. The company is converting a former sugar mill into a power plant, and will use locally grown biomass, including eucalyptus, as fuel.

Another project well on its way to fruition is being carried out by Honeywell’s UOP, Envergent Technologies and several other partners. The project will be implemented in two phases, with phase one already complete. At the integrated biorefinery in Kapolei, Hawaiian crops such as macadamia nuts and sugarcane will be sent through a rapid thermal pyrolysis process (RTP) and converted into a liquid biofuel.

Located at the Tesoro Corp. refinery, the integrated biorefinery will be used to demonstrate viability of the RTP technology, test the fuels produced and evaluate the environmental footprint of the fuels and process technology. Dave Cepla, managing director for Envergent Technologies, says phase one of the project focuses on producing a direct substitution for heavy fuel oil. “We will operate that phase for some period of time, and the second phase—engineering, which is ongoing—will upgrade the technology, probably beginning during the middle of next year.”

The fuel will then be upgraded into transportation fuels to produce a blend of gasoline, diesel and jet fuel, according to Cepla. Regarding feedstock, Cepla says the objective of the project is to produce a wide variety of biomass material native to Hawaii—grasses, some bagasse, certain trees—and some that are not indigenous as well. “Are resources limited on the island? Certainly,” Cepla says. “There is only so much land mass. But we’re working with commercial developers who are looking toward the future, looking at either acquiring or leasing land on a number of the islands to plant purpose-grown crops in a sustainable fashion. We believe there’s enough land mass to be able to sustain a long-term commercial operation on the land.”

Cepla says most of the resources needed for the project requires capabilities not commonly found on the islands, so most are being shipped in. “The Hawaiian Islands don’t really have a heavy industrial presence, and so most of the skill sets needed from individuals and manufacturing facilities don’t exist,” he continues.

Cepla says the project site was chosen for a number of reasons, but mostly because of the partners involved, particularly Tesoro Refining. “They’ve given us land space on which to build the facility, and that was an important element,” he says. There are more partners, including the University of Hawaii, and to a great extent the project was driven by those partners and their location.

Cepla adds that Hawaii is welcoming of projects such as this one. “They’re very dependent on bringing oil in, which is an expensive proposition, so they are heavily invested in trying to find alternatives,” he says.

—Anna Simet