I’m trying to reconcile several apparently conflicting statements about possible environmental impacts of the proposed Aina Koa Pono biodiesel facility on the Big Island.
Testimony submitted to the PUC by Shawn Kelly, VP of AECOM, the engineering firm performing due diligence on the proposal, asserts “there will be very little emissions other than carbon dioxide from this plant since this is a closed cycle plant.”
However, in a response to the Office of the Consumer Advocate filed with the PUC by Hawaiian Electric (and quoted here yesterday), the company said Aina Koa Pono “is in the process of securing EPA confirmation that the threshold for PSD for AKP’s project will be 250 tons per year of any regulated pollutant versus the more restrictive 100 tons per year.” PSD, in this case, refers to “Prevention of Significant Deterioration,” a requirement of the Clean Air Act, I believe.
I turned next to an earlier due diligence study by the Herty Advanced Materials Development Center. It is included as an attachment to HECO’s initial application to the PUC in the Aina Koa Pono matter.
This failed to clarify the situation. Herty’s statement on possible discharges was simple and to the point.
Herty was not provided with data to assess environmental emissions.
That was it.
There was also an additional caveat.
These findings represent the professional opinions of the authors and are based on information provided to the authors by representatives of BFT Bionic Fuel Technologies Ag, and TekGar. The authors do not many any representations regarding the usefulness of the technologies reviewed for any commercial or financial purpose.
But I suppose this is what public hearings are supposed to do–identify problems or areas of uncertainty and provide an opportunity for proponents of the project to provide additional evidence for review.
Skimming through the lengthy application and related materials provided some additional perspective. I’ve been puzzled at Hawaiian Electric’s less-than-stellar record at choosing partners in its development of renewable energy resources. There was HECO’s fiasco with Imperium Renewables, and a similar debacle with BlueEarth, both involving contracts for production of biofuels.
Haste may be a key factor, as legal deadlines are looming. Here’s an excerpt from HECO’s “2010 Renewable Portfolio Standard Status Report.”
Hawaiian Electric Company and its subsidiaries, Hawaii Electric Light Company and Maui Electric Company (collectively, the “Hawaiian Electric Companies”), have achieved a consolidated Renewable Portfolio Standard (RPS) of 20.7 percent In 2010. This is an increase from the 19.0 percent achieved in 2009 and is primarily the result of the additional energy efficiency demand-side management (“DSM”) implemented in 2010 and Increased installations of solar water heating and photovoltaic systems. In 2010, renewable energy generation totals were hampered by lower generation output from biomass and hydroelectric resources.
New DSM program participants in 2010 contributed approximately 111,263 megawatt-hours of additional electrical energy savings.^ Also, approximately 788,246,megawatt-hours of electrical energy savings in 2010 came from participants in the Hawaiian Electric Companies’ and Public Benefits Fee Administrator’s (“PBFA’s”) energy efficiency DSM programs from previous years that continue to save electricity. DSM continues to achieve significant energy conservation benefits.
This report shows that the Hawaiian Electric Companies have exceeded the 2010 RPS compliance percentage of 10% required by Hawaii law. However, achieving higher RPS percentages beyond 2010 will have its challenges since the current RPS law, which became effective on July 1, 2009, will not allow the electrical energy savings from energy efficiency and solar water heating technologies to count towards the RPS from January 1, 2015 (the 2015 RPS target is 15%, the 2020 RPS target is 25% and the 2030 RPS target is 40%). Excluding electrical energy savings from energy efficiency and solar water heating technologies, the 2010 RPS for the Hawaiian Electric Companies is 9.5% compared to the 20.7% stated above. This 9.5% figure represents how the RPS will be calculated in 2015 when the RPS calculation will be based only on renewable energy generation and customer-sited grid-connected renewable energy.
That may explain the haste and the less-than-stellar record of choosing development partners.
And then I ran across several articles in which venture captalist Vinod Khosla discusses his investments in new and unproven energy technologies. Khosla says he expects 90% to fail, but the investment will be worth it if he hits one that proves to be a game-changer (“Billionaire Venture Capitalist Vinod Khosla’s Energy Bets Inch Forward,” and “Khosla: MS green energy start-ups have 90% chance of failure“).
HECO’s opportunities in renewables are likely shaped by the choices by such investors, who might prefer high risk projects with high potential returns, over more tested but plodding investment alternatives that might have higher chances of success but lower rates of return.
So there are several sets of interests coinciding. HECO’s interests in finding reliable sources of renewable energy on a tight timeline, the interests of major venture capital investors looking for a potential big payoff, interests of ratepayers who will be asked to pay the freight in the long run, and interests of the general public. There may be more, of course. But that gives a bit more sense of what complicated terrain this is.
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You likely saw the piece by Life of the Land’s Henry Curtis on some of the incongruities of HECO/HELCO’s push for biodiesel.
http://tinyurl.com/3sdcsxy
Particularly interesting is the break down of subsidy costs which tag every HECO customer across the State, even though the electricity only goes to HELCO customers. Basically we all get to subsidize the venture capitalists touting an unproven technology.
HELCO/HECO are brother subsidiaries of HEI –same mother company.
I am struggling to find the distinction Oahucentric folks are attempting to draw.
Meanwhile, my question of inferred pollution of the Ka’u proposal remains unanswered.
Mr. Gozinya should be relieved to learn he will not be subsidizing venture capitalists in any way due to the AKP project. The utilities will pay at a pre-set rate only for biodiesel delivered. If the technology does not work, or costs too much, the risk is entirely on investors in AKP. The fuel can and likely will be used at other plants than on the BI.
It is positively weird when some of the same people who complain about imported biofuels are upset when we lay the difficult groundwork for more local biofuel. Go figure.
“According to Hawai`i Electric Industries (HEI) filings with the U.S. Securities and Exchange Commission (SEC)…. the subsidy per gallon would be $1.6595. Since there are 42 gallons per barrel, the subsidy for a barrel of biodiesel would be $69.70.
Price (Barrel Biodiesel) = Price (Diesel) + $69.”
Say what Mr. Rosegg? Should one assume that AKP makes no profit at that subsidized differential?
Mr. Gozinya, no one suggests AKP does not intend to make a profit. But that profit will be determined not by the difference between diesel and biodiesel but the difference between what they are paid for biodiesel and what it costs them to make it: growing and harvesting the feedstock, processing it and delivering to the power plant. In the beginning the investment to do that from scratch will be high. If oil goes up (as most of us expect it will) the differential will diminish and disappear. That could take some years or happen overnight. Finally, there are values to local biofuel production that transcend price: local jobs and taxes, secondary economic opportunities and the fact that no external events can deprive us of the biofuel produced here, unlike oil which can be disrupted and prevented from reaching us due to natural disaster, war or revolution in the Middle East or Somali pirates (who today hold 5 tankers for ransom). If you think AKP’s operators and investors have such a sure thing, you should buy shares.
PS. We expect local biofuel, from crops grown in Hawaii, will be environmentally better than the importation and refining of oil on Oahu for reshipment to the Big Island to be burned there. It will green acreage that has been fallow for years, waiting to grow housing developments instead of plants. Does this have any value to Hawaii? I think so. And remember, biofuels are just one of a list of technologies we must pursue to reduce our near total dependence on oil for air and surface transportation and electricity. Just one.
If all that’s true, then there’s no need to charge all HEI customers for energy used by HELCO only. Sorry, but we’re providing AKP with a guaranteed purchase at a guaranteed price, subsidized by dunning 1000’s of customers who don’t get the energy. Bad policy.
I guess you have made up your mind, Richard. You don’t want to share in the cost of developing biofuels. You have the right to that opinion, of course.
All fuel contracts (and purchased energy contracts) basically set the amount that may/must be purchased and a mechanism for setting price. In the old days, price by law was set by what it would cost for oil, the so-called avoided cost. Today contracts for renewable energy and fuel are not set at avoided cost but at the cost of producing the renewable energy or fuel plus a reasonable profit. The PUC with input from the Consumer Advocate will determine whether the price to be paid AKP is reasonable, given their costs and the benefits of the contract.
One thing for sure. If we don’t reduce our oil dependence, as the price of that oil rises all people on all islands will share in paying that price, which will be set by companies and circumstances completely beyond our control, with no concern for the well-being of Hawaii. Further, most extra dollars we are paying today and will be paying tomorrow for gasoline and electricity go out of Hawaii.
Changing that will require some serious investment and higher prices today in the interest of a better future.
That is a separate issue from how we choose to pay for the investment. If we impose it entirely on the people of Hawaii Island in this case, there is a fair chance the AKP plant will not be built becuase the BI folks are already paying high prices for oil-fired generation and some of those old avoided cost contracts. If we spread the cost among all 400,000 of us customers on Oahu it becomes a better possibility and, in my estimation, more fair into the bargain. You don’t have to agree. Writing “bad policy” does not make it a bad policy, only one you do not care to support. It has been an intesting “convesation.” Polite and civil. We will have to agree to disagree.
What a scam, getting Gobernment to minamize the risk for a proven inferior product. Because moneied interests can maneuver their way to the front of the line for handouts like scum on the pond, the consumer/taxpayer will pay and pay.
Dean Little
But I don’t know that anyone has shown this to be “a proven inferior product.”
Ian~ I’m guessing Dean refers to the fact that biofuels produce significantly less energy for a like amount of product when compared to petroleum. So essentially we pay more but get less – not unlike the cereal companies raising prices and reducing the content of cereal in the box.
The HECO biofuel plant proposal is based upon commercially unproven technology rejected by Marion County, FL in 2009 for the same reasons as mentioned on radio and the web at charleneongreen.org.
One reason was lack of 100% financing by the supplier. The county was unwilling to use taxes or surcharges for a private company’s risky, unproven project.
http://heartoffloridasolidwaste.org/pdf/MarionEvaluationCommitteeReportforWTEFINAL09-02-09.pdf
The technology developed by Bionic Fuel Technology ( BFT ) of Germany is based upon a single small lab experiment in Aarhus, Denmark, a facility owned by a Farmers Co-op to get rid of straw, rapeseed, and swine manure, not to burn stuff commercially to produce electricity. The technology does not exist on a public commercial scale anywhere in the world, including Germany where BFT developed its technology. Hawaii is to be a guinea pig or lab rat to continue the Denmark lab experiment.
HECO continues to put up barriers to progress because burning stuff is all it knows how to do and wants to continue doing so for another 20 years to stifle competition from cheaper geothermal energy.
Aina Koa Pono was newly formed for the sole purpose of this project. It has NO EXPERIENCE in biomass/biofuel/biodiesel and the former HECO CEO, Robert Clarke is trying to stack the deck in HECO’s favor by being on its Board of Advisers.
We will get more local jobs from geothermal expansion than we ever will get from a lab experiment producing biodiesel, a fuel that should be used for transportation, not for generating electricity.
Here is a link to video, mp3 files, and slide presentations given to the Hawaii State Legislature on July 7 by the geothermal group on the Big Island showing how we can solve our energy problems with geothermal.
ENE/EEP/WLH/WLO/HWN/HAW 7/7/11
http://olelo.granicus.com/ViewPublisher.php?view_id=13
http://www.honoluluweekly.com/archives/coverstory%202001/08-29-01%20Heco/08-29-01Heco.html
Ian, here is a New York Times article suggesting that biofuel use in Europe is actually environmentally worse than burning nonrenewable fuels.
http://www.nytimes.com/2011/09/26/business/global/questioning-europes-math-on-biofuels.html?src=recg
I once read that ethanol from sugar cane in Brazil does require large amounts of fertilizer from petroleum, and that although such ethanol does help prevent urban pollution, production of the product contributes to rural pollution. The conclusion was that it is a values-based (nationalism) decision to have cars in Brazil run on ethanol, not really an environmental or national security solution. (There is also a strong agricultural lobby in Brazil.) But ethanol in Brazil is neither worse or that much better than directly burning oil.
I read that long ago, so perhaps the situation in Brazil has changed, and perhaps it will change again in the future as ways of breaking down cellulose and using that as feedstock emerge.
But all this is something to think about when it comes to biofuels in Hawaii.