Hawaii’s Renewable Energy Revolution
by Dave Fessler, Advisory Panelist
Wednesday, September 16, 2009: Issue #1094
Hawaii: Pristine black sand beaches… surfing… spectacular volcanic eruptions… and miles of pineapple plantations. If you are like me, this is what comes to mind when you imagine Hawaii.
What may not come to mind, though, when you think of America’s 50th state are its energy resources – and specifically, the fact that it gets 77% of its power from oil-fired power plants. That’s a unique statistic within the United States. Coal-fired plants provide 14% of power, and the remaining 9% comes from renewable sources like wind and solar energy.
Suffice it to say, tourism is Hawaii’s largest industry, with agriculture playing a major role, too. And not unlike the rest of the country, the one thing needed to keep it all running smoothly is a reliable source of electricity.
Problem is, Hawaii is dependent on fossil fuels for more than 90% of its power – an issue that became shockingly clear when oil spiked to $147 a barrel last year. As a result, the Hawaiian Electric Company – the state’s main electric utility – was briefly forced to charge users more than 50 cents per kilowatt-hour – over five times the national average.
So what is the state doing to relieve this situation?
Hawaii Treads Down the Renewable Energy Path
For Hawaii, wildly fluctuating oil prices and potential supply disruptions leave it uniquely vulnerable. The state estimates that every 10% increase in oil prices reduces its GDP by 0.5%.
Clearly something had to be done. And there is some good news.
Because of its unique location and physical makeup, the Department of Energy (DOE) estimates that Hawaii can potentially meet 60-70% of its overall energy requirements through the use of renewable energy sources.
And last year, under an agreement between the DOE and the State of Hawaii, long-term plans were set in motion that will result in Hawaii getting 40% of its power from renewable sources by 2030.
This landmark agreement – and its ultimate implementation – is being viewed as a national experiment. If successful, it could ultimately be replicated in other parts of the country. And island nations could benefit, too.
Here’s how the DOE and Hawaii are doing it…
Hawaii’s Four-Track Renewable Energy Plan
A working group including members from both the DOE and Hawaii are addressing four main areas of renewable energy performance:
- End-Use Efficiency: The goal is to achieve zero net-energy use buildings and communities, along with significant reductions in power usage by military bases.
- Electric Generation: Significant expansion of renewable energy at both the state and local levels, and the facilitating of distributed renewable generation on a statewide basis.
- Energy Delivery: Additional grid development and improvements to the existing grid in the form of smart-grid management, as well as grid energy storage that will optimize renewable energy sources.
- Transportation: The formation of a long-term strategy for the implementation of the production, distribution and use of alternative fuels for transportation to acceleration the adoption of electric vehicles.
The group has produced two, five, and ten-year pans that have marked the initial actions necessary in order to kickoff the activities in each of the above energy performance areas.
Putting the Four-Track Plan Into Fast-Track Mode
With an agreement in place, Hawaii’s governor, Linda Lingle, has fast-tracked the plan.
She’s called on privately held California startup firm, Better Place, to install as many as 100,000 electric car-charging stations by 2012 – a project worth $100 million. The goal is to have car-charging stations pop-up all over the Hawaiian islands, with privately held Better Place supplying the batteries and recharging services.
This plan assumes that the major car manufacturers buy into the arrangement So far, Nissan-Renault has agreed to make vehicles that will work with Better Place’s network of stations. And I expect more car companies to announce plans to participate, too.
Of course, all this additional power to charge the cars has to come from the grid – and major grid improvements are already underway.
Supercharging Hawaii’s Electric Project
All of Hawaii’s six separate grids are in the process of being connected together via undersea electric cables. Once in place, Oahu will get its power through them.
And with all the renewable wind power and solar farms being planned as part of the increase in renewable energy generation, managing the fluctuations in supply and demand becomes a more daunting task than it is now.
As a result, General Electric (NYSE: GE) is right in the thick of the plan, developing ways to store energy via batteries and pumped hydro storage. This will allow the Hawaiian Electric Company to smooth out peaks and valleys in its overall energy supply-demand model.
Hawaii’s plan is just now getting underway – 2030 isn’t that far down the road. But as its interim successes become apparent to the rest of the country and the world, companies like GE and Better Place will certainly be in the catbird seat.
Good investing,
Dave Fessler
P.S. Hawaii isn’t the only place that is overly dependent on fossil fuels – far from it. With the global population growing and traditional energy resources becoming scarcer, many nations are pushing for ways to increase their alternative and clean energy sources. There’s one “pure play” on Earth, however, that has countries like China, Japan, and India scrambling for it. What’s more, one little-known energy firm has made this resource its core business – and an investment would give you direct access to this highly sought-after renewable raw material (it’s not solar or wind, by the way). It’s also a stock that could double in the next six months. Check out the details here.
- Renewable Energy Rollercoaster
- Americas Wind Energy Corporation (Nasdaq: AWNE): Stock of the Day
- Wind Power: Why This Renewable Energy Could Solve The U.S. Oil Addiction
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13 Responses to “Hawaii’s Renewable Energy Revolution”
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September 16th, 2009 at 12:35 pm
This can’t come soon enough. Just got back from a week on Kauai. Gas was $1/gal more than in Ga. Despite the constant wind, didn’t see one windmill anywhere on the island. Our resort did have thermal solar, but I was actively looking during the week, and it was few and far between. Great MaiTai’s!
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September 16th, 2009 at 12:39 pm
Wind and Solar renewables are highly intermittent. Energy storage of all types on both sides of the meter will be required to compensate for the intermittancy of both supply and demand with the utiolity caught in the middle. New PUC tariffs are needed for time of use pricing to make all this work well for the rate payer.
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September 16th, 2009 at 2:09 pm
We have established a fuel cell business and just signed our first agreement for six million. I wish everyone understood that lithium is limited in supply but hydrogen is not. We will take our customers off the grid allowing them to be self-reliant and conserve capital.HP increases in vehicles, engines clean and over 98% efficiency as far as burn is concerned.Residential unit for supplying heat, electricity and cooling half the size of typical air conditioning unit.
This is the future.
Will go public hopefully in two years.
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Dave R. Reply:
September 16th, 2009 at 4:18 pm
How will the hydrogen be obtained, and how will it be stored to mitigate losses prior to use in a vehicle or residential unit? Please provide a more detailed, sophisticated and technically rational answer than merely stating “water” and adsorption or absorbtion or in the form of a compressed gas or in a liquid. As an engineer I am currently a skeptic.
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September 16th, 2009 at 6:14 pm
It is great to see any jurisdiction adapting new technology but a proven patented system of natural microbial drying that turns any organic material including human and animal biosolids into clean green naturally produced solid fuel is being opened to the world markets. Imagine no fossil fuel use to create energy, clean odor free installations that produce fuel 24/7 having a very small carbon footprint and leaving no CO2 no methane or other NOX gases in its creation or use. It is available and it is the future, watch for it, it is changing the world.
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September 16th, 2009 at 6:59 pm
The vehicle-to-grid communication technology is helping the battery serve as a storage to prevent the costly blackout standing at about $90 to 100bn per year. That means utilities are shedding cost for additional storage facilities and ratepayers are selling electricity for peak hours so that EVs can make more economic sense, as we know.
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September 16th, 2009 at 9:38 pm
Hawaii seems like a natural place for geothermal energy since it is a volcanic island, Iceland uses
geothermal and it is also a volcanic island.
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R.Murashige Reply:
September 17th, 2009 at 3:15 pm
You seem to have the same vision that many had several years back. Pohoiki Geothermal Power Station is something you need to visit. It is on the slopes of the east rift zone, an active rift, (last activity – 1960, About 3.5 miles away). Po0hoiki is not producing anywhere near trhe planned objectivr. The earth below is cooling and new wells are constantly being drill to offset the production loss. They are into horizontal drilling.
Insurance companies have ‘black listed’ home insurance in the area.
The East rift is where Puu OO is. It has been active since 1982, with magma still flowing into the sea.
Frankly, I think this plan is a ‘make work’ project funded by the ‘Hill’.
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September 17th, 2009 at 12:20 pm
It still seems that in this debate we miss the one thing that needs to be done. We need to move energy companies from producer to distributors. If each individual would take responsibility for their own home, let’s say, combining solar, wind power, providing the excess back to the grid, taking from the grid if needed, storing as needed. We would produce a much more efficient system that would require far less fossil fuel, and it’s emissions. The technology virtually pays for it self, and will become much cheaper over time. We need to stop waiting for government programs, do what is right and profitable for ourselves.
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September 17th, 2009 at 3:25 pm
I find it less than honest or intelligent to take the “we know more than anyone before us” attitude with regard to energy use and conservation.
I live on the Big Island of Hawai’i and off the grid for more than two decades in a community that has no public services (telephone, water, electricity, trash pick up and etc). I am appalled that No One has consulted with farmers who have lived using solar and 12v as well as inverters for 110v and catchment for water etc.
Over 20 years ago I had solar panels on my truck in Berkeley but was considered nuts…like the early biodiesel folks- when will we learn to use resources rather than arrogance?
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B Elwin M Reply:
September 20th, 2009 at 10:12 am
The key word here is “USE”. We don’t use energy, we abuse it. If the energy was used properly, we would use about 45% less energy and reduce out carbon footprint to almost nil.
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September 18th, 2009 at 10:06 am
Super post, Need to mark it on Digg
Have a nice day
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September 20th, 2009 at 10:11 am
Great Post, It seems the big oil price surge woke up the local govt to think about importance to be self reliant.
Solar thermal for heating water is most efficient way to use solar power, electricity production is way to costly to justify as per present technology.
Bio diesel , natural gas production from food , organic and human waste can meet local community, residential needs while reducing methane and carbon emissions.
wind energy is cost competitive and will pay for itself.
Natural gas power plants can meet additional requirements.
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