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Dec 23
2013

Decoupling (2013-0141)

Filing, Dec. 20: Blue Planet Foundation's Statement of Position on Schedule A Issues

PPA Approval between HELCO and Hu Honua Bioenergy: Decision and Order No. 31758

On Dec. 20, the PUC issued its approval of a Power Purchase Agreement for Renewable Dispatchable Firm Energy and Capacity between HELCO and Hu Honua Bioenergy. It is notable that while the PUC approved this renewable generation, it comes with strings attached: HELCO must also provide a Power Supply Improvement Plan to retire fossil generations and increase the incorporation of other renewables through storage and demand response. Many of the PUC's directives were informed by the RSWG (Reliability Standards Working Group) process that Blue Planet was heavily involved in.

Key points of the order:

-  The Commission approved the PPA with a levelized energy payment rate of 25.3 cents, noting that it will provide “firm, dispatchable, renewable energy [and] ancillary services” (see p. 48). It will also provide economic benefits to HELCO ratepayers (see p. 50).
 
-  The Commission orders HELCO to file a Power Supply Improvement Plant within 120 days of this order, which shall include (i) a fossil generation retirement plan, (ii) a generation flexibility plan, (iii) a must-run generation reduction plan, which will analyze the “costs of HELCO’s current must-run designation policies,” and (iv) a generation commitment and economic dispatch review, which shall include a description of the “methodology by which HELCO incorporates energy storage or demand response” into its economic dispatch process.

-  The Commission cautions HELCO that it "must not accord preferential treatment to utility-owned generation resources versus Independent Power Producers where the IPPs are more fuel-efficient and economic than utility generation." (See p. 110.)

-  The Commission concludes that "HELCO should re-examine its existing generation unit commitment and economic dispatch practices to ensure that: (1) the selected mix of firm and as-available resources will minimize energy costs; (2) non-traditional sources of ancillary services, such as energy storage and demand response, are considered and, if lower-cost, utilitized to supply these services; and (3) curtailments of renewable energy resources, where necessary, are accomplished in a cost-effective manner from the perspective of ratepayers." (See p. 112.)
 
-  The Commission concludes that “HELCO has the responsibility to make major changes to both its existing fossil generation portfolio and its current power supply operational practices in order to reduce power supply costs and to provide significant customer rate relief.”  (See p. 120.)
 
-  HELCO must plan to “expeditiously retire older, less efficient fossil generation, reduce must-run generation, increase generation flexibility, and adopt new technologies such as energy storage and institute operational practice changes, as appropriate to enable integration of a diverse portfolio of additional low cost renewable energy resources that are uniquely available on the Island of Hawaii.” (See p. 120.)
 
-  The Commission notes that it seeks actionable strategies and implementation plans rather than “numerous technical analyses that conclude additional studies are required.” (See p. 121.)

Denial of biodiesel supply contract between HELCO and Aina Koa Pono-Ka‘u: Decision and Order No. 31759

-  On Dec. 23, the PUC issued its denial of a biodiesel supply contract between HELCO and Aina Koa Pono for approximately sixteen million net United States gallons annually of locally-produced biodiesel over twenty years. As stated in the order:

The commission, based on its extensive review, finds and concludes that HELCO and HECO have not met their burden of proving that the subject contract is reasonable and in the public interest. The commission's decision is supported by the findings and conclusions set forth in this Decision and Order, including, but not limited to, the following:

1. The contract price for the AKP-produced biofuel is excessive and not cost-effective at present and for the foreseeable future, and thus, is unreasonable and inconsistent with the public interest.

2. The commission's approval of the contract will likely require that HELCO dispatch its Keahole combined cycle generation units in an uneconomic fashion (i.e., in uneconomic dispatch mode), and thus, the contract has the potential to displace or curtail more economical, existing renewable energy resources or restrict the additional of other new low-cost, fixed price renewable energy projects.

3. The evidence regarding the external benefits of the AKP Project is not sufficient to support a finding that the contract is reasonable and in the public interest.

HELCO's Geothermal RFP

Notice from HELCO re: RFP for 50 MW of Dispatchable Renewable Geothermal Firm Capacity Generation, Dec. 20: "After careful review of all geothermal bids, Hawaii Electric Light has determined that none of the submitted bids sufficiently met both the low-cost and technical requirements of the Geothermal RFP. We are currently working with the Independent Observer to develop a request that will be sent to the bidders. The request will give the bidders the opportunity to provide additional information so that we can make an informed decision that is in the best interests of our customers and residents and that meets the goals of the Geothermal RFP. These goals include lowering customer bills, reducing our dependence on fossil fuels, allowing for continued integration and management of intermittent renewable resources, maintaining reliability of service, and protecting the health and safety of the public and environment. We appreciate the efforts the bidders have made to date and look forward to working with them and the Independent Observer on next steps." 

Local industry news:

SF Chronicle: Officials say Big Island biofuel plan too costly

PBN: Eight new projects make the Hawaii Clean Energy Leaders list

Star-Advertiser: PUC blocks HELCO buy of biofuel, citing cost

Star-Advertiser: Biofuel firm says HELCO contract not needed for plan to work

Civil Beat: Hawaii regulators approve Big Island biomass plant

Pacific Business News: Aina Koa Pono's supply contract with HELCO denied—again

Hawaii Tribune-Herald: HELCO: Bids don't meet requirements for geothermal contract

Pacific Business News: PUC OKs Hu Honua Bioenergy's contract with Hawaii Electric Light Co.

Scientific American: A solar boom so successful, it's been halted

International Business Times: Solar power growing pains: How will Hawaii and Germany cope with the boom in alternative energy?

Dec 03
2013
Jan 11
2013

Stay tuned! We're compiling the appendices for our renewable tax credit study, peer-reviewed and updated from last spring with comprehensive analysis and demographic information on PV adopters. Meaty stuff.

Apr 19
2012
aquino.jpgToday we released the results of study that analyzes the economic impact of the state's renewable energy tax credit. This issue has been the subject of much debate this legislative session. We wanted to better understand the exact economic costs and benefits of the credit to the state as a whole, so we asked former University of Hawai‘i economist Dr. Thomas Loudat (who did a similar analysis in 2002 that was reported to the state legislature) to analyze the economic impact.

What we found was remarkable. The existing tax credit yields a clear, significant net fiscal benefit to the state. For every PV tax credit dollar the state invests, the payoff includes:

-- $13.37 stays in Hawai‘i (what we would have sent out of state to import oil)
-- $44.70 in additional sales (from the oil savings circulated into the local economy)
-- $3.17 in new tax revenues (generated from those added sales)

Loudat's findings show that each PV installation also produces new jobs and additional local labor income. A typical 118 kW commercial PV installation, for example, yields 2.8 local jobs each year over the 30-year lifetime of the system.

Blue Planet believes that the tax credit stimulates private investment in renewable power, and these investments provide a community benefit. We also recognize that renewable projects draw federal dollars into Hawai‘i's economy that otherwise wouldn't be here. Dr. Loudat's study allows us to assess what these benefits are worth.

While Blue Planet supports the existing tax credit, we are backing a measure to reduce the tax credit from 35% to 20% over the next three years. This and other changes to the law are currently contemplated in the Senate Draft of House Bill 2417. Acknowledging that the price of PV systems has dropped dramatically, Blue Planet's position is that the state's share in incentivizing the systems can and should decrease. But it is also essential that we maintain the right tax credit "nudge" to help more and more families and businesses put solar to work for them—with long-term benefits for everyone.
 
Unlike other tax credits, the investment in renewable energy is not a one-shot deal. The state continues to reap economic benefits over the 30-year lifetime of the system--consider the oil costs offset, year after year. It makes sense in the big picture, too, when you look at all the other reasons we need to move beyond oil. The dividends pay off in more than just dollars--there's value in energy security and reducing CO2 emissions, too, and these are benefits that other tax credits don't provide.

As Van Jones wrote in Rebuilding the Dream, "As we think about a new economy, perhaps we can begin to apply some new math — and begin to count what really counts. The earth counts; our kids count; the future counts. Where economic and energy policy meet, we should calculate not only what we spend, but also what we save. And we should consider the payoffs from the investments we make in human and natural capital."

Read more:

"Often-overlooked benefit of solar is how it benefits the economy"
Editorial by Jeff Mikulina and Dr. Tom Loudat, Honolulu Star-Advertiser
"Study: Hawai‘i solar tax credits pay off" by Duane Shimogawa, Pacific Business News
"Blue Planet: Renewable energy tax credit boosts local economy" by Sophie Cocke, Honolulu Civil Beat
"Sun, Shine" by Derrick DePledge, Honolulu Star Advertiser  (Clever headline!)
Mar 02
2012

Posted on in Blue Planet Updates
We get this question a lot: "Why don't we just put solar panels on all the rooftops in Hawai‘i? Wouldn't that provide enough electricity for everyone?" Someone just asked again yesterday, so I thought I'd share our answer:

It's a good question. Let's do the first order approximation.

First, how much electricity to we use? According to the DBEDT energy trends, we use about 10 terawatt-hours (TWhs) of electricity annually. In fact, 10125.94 gigawatt-hours (GWhs) in 2009, 10013.10 GWhs in 2010, and about 9985.55 GWhs in 2011. So that's our (hopefully shrinking) target.

Second, how many roofs do we have to cover? Let's just look at residential. According to the 2011 US Census, Hawaii has 519,508 housing units, 39.2% of which are multi-family. So let's just look at the single family units (we'll be more conservative here and more generous elsewhere). So that gives us 315,861 single-family home rooftops. Now let's say for each rooftop we can fit a 4 kilowatt (kW) system. This is probably being a bit generous, given the size and possible shading issues. With all those rooftops tiled with 4 kW of PV each, we have 1,263,443 kWs, or 1263 MWs of PV (which, BTW, approaches the total system capacity on Oahu).

Of course, the sun isn't always shining. In fact, for PV, the "capacity factor" is between 15% and 20%--meaning that at any given moment you will have able to produce between about 15% and 20% of the rated PV capacity. Let's use the generous 20%. For our rooftops this means (20% X 1263) 253 MW of PV capacity. Now we can look at the total production over one year (at the already "de-rated" PV installation). So 253 MW X 8760 hours in a year = 2,213,553 MWhs, or 2,214 GWhs, or 2.2 TWhs. This would provide about 22% of our overall electricity use.

This 22% is probably conservative--we ignored all of the commercial rooftops. Plus we are seeing more and more large ground-mounted PV arrays (usually in 5 MW blocks because that is the largest size before the utility needs to competitively bid). Nonetheless, it reminds us that we need a mix of renewable energy sources. And yes, we hope to shave our 10 TWhs of usage by 30% come 2030 (the HCEI target), but we're also adding a bunch of electric vehicles to the grid (which could just cancel out that efficiency gain--which is fine for the big picture).

By the way, any guess of how much all of that PV would cost? About $10 billion. It would pay for itself in about 13 years.
Sep 22
2011

Posted on in Energy News

According to the Hawaii Tribune-Herald, Tropical Dreams Custom Ice Cream Co., now generates more than 90 percent of their energy through their recently installed solar PV system. Blue Planet Foundation helped the Big Island gourmet ice cream company apply for $125,000 in USDA grants to help finance the system that was designed and installed by RevoluSun. The 101.2 kw system produces the equivalent of the energy consumed to drive almost 7 million miles a year, and it's expected to pay for itself within three years. Congratulations, Tropical Dreams! Read more. (Photo: Tropical Dreams)

Don't Feed the Money Monster