Renewable power production up on Big Island

Renewable power production up on Big Island

12 August 2011, by Chelsea Jensen (West Hawaii Today), edited by U.Bonne

Independent geothermal, wind and water power providers produced some 355 million kWh (kilowatt hours) total of electricity in 2010 via power purchase agreements and consistently have met, or exceeded, their contracted production requirements, said Curtis Beck, Hawaii Electric Light Co. (HELCO) Energy Services Department manager. Including power produced by HELCO, the company sold 1100 million kWh of electricity last year, including the above ~35% renewable electricity.

Add in some 11.9 million kWh produced by net energy metering (NEM), which allows a home or business to produce its own energy, and the percentage of renewable energy used on the island jumps to about 42 %, he said.  There is now one feed-in tariff (FIT) producer, Hawaii County’s West Hawaii Civic Center, which came online Aug. 2 with an expectation of producing up to 250 kW (kilowatts) at full capacity. Power not used by the building will be sold to HELCO at a rate of 18.9 c/kWh.

Future renewable energy plans — The utility agreed to the 2009 Hawaii Clean Energy Initiative that sets an incremental goal of producing 40 % of electricity and 70 % of overall energy through renewable resources by 2030. It must submit an annual status report showing its progress.  In 2010, the Big Island exceeded the requirement by more than 20 %, according to HELCO.

Utilities statewide, including HELCO, Oahu’s Hawaii Electric Co. and Maui Electric Co., reported 20.7 percent of electricity being produced using renewable resources. HECO reported having 16.6 percent of energy produced renewably, while MECO reported 26.1 percent.  According to the U.S. Department of Energy’s Energy Information Administration, renewables accounted for 10 percent of total U.S. electricity generation in 2009.

Electric rates not dropping — While more than a third of the Big Island’s power is from renewable resources, consumers have not seen electric bills lowered because rates paid to independent producers are directly tied to the more costly use of fossil fuels to produce energy, Beck said.  The independent producers are paid a rate that reflects HELCO’s avoided cost, the cost it would have cost the utility to produce the power itself, of 21.3 cents during peak hours and 18.3 cents during off-peak hours, plus room for a “reasonable” profit, he said.

“In the long run, the idea is that we may bear a higher cost now to get a grid where we have a majority of the power being generated renewably, but renewable energy will look much more economical compared to oil,” Beck said.

In the future, he said the company hopes to tie the cost of independently produced power to production cost versus having rates paid to the producers based on HELCO’s production costs. Contracts already in place, many of which are for 20 years or 30 years, would not be affected by a change to avoided costs, he added. “Our goal is to get those future contracts for independent power producers to be less than the avoided cost and that savings would be directly passed on to the customer,” he added.

Renewable energy’s past and future — The Big Island, Beck said, has for decades used resources other than fossil fuels to power the island’s electric grid.

Up until the end of World War II, he said, nearly 80 percent of the power produced for the Big Isle came from hydroelectric plants situated along rivers. After the war, through the early 1990s, renewable energy was purchased from sugar companies that burned sugar cane to create power.

With the fall of the sugar industry in the 1990s, HELCO had to rely more on petroleum for energy production because the island’s population had increased so much between the 1970s and 1990s, he said.

“In the 1970s, as much as 40 percent of power used on the island was from renewable resources,” Beck said. “We are just getting back to where we were when the sugar companies went under and we lost a lot of our renewable generation. It seems to have always been a tradition of this island that we’ve been fairly self-sufficient throughout most of our history.” By 2015, HELCO hopes to generate 50 percent of its power from renewable sources, he said. Being able to meet that number will require HELCO to secure more independent power contracts.

The company has applications before the Public Utilities Commission to: (!) Purchase additionally 8 MW (megawatts) from Puna Geothermal Venture, which already sells 30 MW to the utility, as well as (2) Purchase biofuel from Aina Koa Pono, which might produce 16 or 32 million gallons of biodiesel and biogasoline annually through biomass conversion in Ka’u, to be used by HELCO to produce energy; this is the application that includes a request to charge a ratepayer subsidy or 1/3 c/kWh.

If you would like to read our testimony to the PUC regarding the requested 1/3 c/kWh subsidy, click here.

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