a sustainable energy future presentation to boma may 12, 2009

A Sustainable Energy Future

Presentation to

BOMA

May 12, 2009

Hawaii is Uniquely Dependent on Oil for Electricity

Petroleum2%

Coal50%

Natural Gas20%

Nuclear19%

Other Renewables

2%Hydroelectric Conventional

7%

Oil (Petroleum)

78%

Natural Gas0%

Hydroelectric Conventional

1%

Other Renewables

5%Coal13%

U.S. Electricity Generation

Hawaii Electricity Generation

~ 80% Hawaii’s electricity is from oil

3

Hawaii is the most petroleum dependent state

Petroleum dependence for electricity – top six states

4

Alaska North Slope oil, the basis for the design of our refineries, is no longer available

More than 96% of petroleum in Hawaii now comes from foreign sources

US – Alaska

5

Hawaii has the highest electricity prices in the U.S.

Hawaii and US Average Revenues per kWh 1990 - Nov 2006

$-

$0.0500

$0.1000

$0.1500

$0.2000

$0.2500

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

An

nu

al A

vera

ge

Do

llars

per

kW

h

HAWAII

U.S. Average

20.87 CENTS/kWh126% Increase Since 1990

8.88 CENTS/kWh35% Increase Since 1990

6

Furthermore …

Hawaii’s gasoline prices are among the highest in the United States

Hawaii

National

7

Economic impact of dependence on expensive energy

Household fuels and utilities costsrose 36.4 percent, year-over-year, in the Honolulu CPI during 2Q’08

Mainland energy costs are 4% of a state’s Gross Domestic Product; in Hawaii, it approaches 11%, almost 3 times as much

Between 2007 and 2008, State Government consumption of electricity has decreased 1.17%, but expenditures have increased 19.55%

8

Energy Security is also a Priority

Hawaii typically has a 14-21 day supply of oil

9 9

400

100

160

75

300

350

320 70

230

80

80

70

35

120

30

15

Source: Team analysis

Kauai (100)

Oahu (1360)

Molokai (10)

Lanai (10)

Maui (280)

Hawaii (240)

Total installed capacity of selected renewables, 2030Megawatts

Solar

Wind

Geothermal

Pumped Storage

Cable1 GW45 km

Cable1 GW15 km

Cable1 GW25 km

(Peak 2030 demand in MW for each island is in parentheses)

Hawaii’s Wealth of Renewables

10

Solar energy: Hawaii sites are rich in solar resources

11

Wind energy: Among the best sites in the nation

http://hawaii.gov/dbedt/info/energy/renewable/wind

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Biomass: Rich tradition of agriculture in Hawaii

13

High temperature geothermal resources are confirmed on the Island of Hawaii, and possible on Maui.

Low temperature geothermal resources identified.

14

Superior wave energy on North and Northeast coasts of major islands

15

Contents

Hawaii’s Energy Picture

Hawaii’s Energy Future: 70% Clean Energy by 2030

A Key Role: Efficiency

Renewable Energy Integration

New Technologies and Systems

16

The Hawaii Clean Energy Initiative was launched onJanuary 28, 2008 with the signing of a

Memorandum of Understanding between the State of Hawaii and the U.S. Department of Energy

“…the Department of Energy will help Hawaii lead America in utilizing clean, renewable energy technologies.”

Governor Lingle

“Hawaii’s success will serve as an integrated model and demonstration test bed for the United States and other island communities globally...”

Assistant Secretary Karsner

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Hawaii Clean Energy Initiative

National Partnership to Accelerate System Transformation

The goals are:

Achieve a 70% clean energy economy for Hawaii within a generation

Increase Hawaii’s security

Capture economic benefits of clean energy for all levels of society

Foster and demonstrate innovation

Build the workforce of the future

Serve as a model for the US and the world

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Hawaii’s transition to an economy powered by clean energy, instead of imported foreign oil

…will require a substantive transformation of regulatory, financial, and institutional systems

In 2004, Hawaii’s RPS included 6% renewables, which would increase only incrementally

Per

cen

t R

en

ewab

le E

ner

gy

Range of scenarios under business as usual assumptions (i.e., attainment of RPS, RFS)

GAP

Fundamental systemic transformation is required

Range of scenarios under transformational assumptions (i.e., exploiting technical & economic potential)

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HCEI Scenarios: Analytical Path Toward 70% Clean Energy End-State

First cut at order of magnitude requirements and impacts

Evaluated sensitivity to several factors

No absolutes defined in this evaluation

Most work on electricity, some on transportation, little on jet fuel

Based on current commercially viable technologies; potential game changers like OTEC and algae to energy are not considered

All scenarios are presented without imported biofuels; all scenarios can hit the goals with imported biofuels

Follow-up economic and cost/benefit impacts, refinements in progress.

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8 scenarios tested the impact of energy efficiency levels,PHEV penetration, biofuels, and inter-island cabling

1 Kauai loaded by economics (limit CSP to 14 MW) 3 Kauai loaded by economics (limit CSP to 14 MW)

Hawaii loaded by economics (limit geo to 60 MW) Hawaii loaded by economics (limit geo to 60 MW)Maui loaded by economics (limit geo to 42 MW, deploy 3 MW ocean) Maui loaded by economics (limit geo to 42 MW, deploy 3 MW ocean)Oahu resources loaded by economics - no cable Oahu resources loaded by economics - no cableBiofuels for transportation (only ethanol) Biofuels fill in Oahu electricity to 70% (only biodiesel)Low PHEV High PHEV


Hawaii loaded by economics (limit geo to 60 MW) Hawaii loaded by economics (limit geo to 60 MW)Maui loaded by economics (limit geo to 42 MW, deploy 3 MW ocean) Maui loaded by economics (limit geo to 42 MW, deploy 3 MW ocean)Oahu resources loaded by economics - cable from Lanai, Molokai Oahu resources loaded by economics - cable from Lanai, MolokaiBiofuels for transportation (only ethanol) Biofuels fill in Oahu electricity to 70% (only biodiesel)Low PHEV High PHEV


Hawaii loaded by economics (limit geo to 60 MW) Hawaii loaded by economics (limit geo to 60 MW)Maui loaded by economics (limit geo to 42 MW, deploy 3 MW ocean) Maui loaded by economics (limit geo to 42 MW, deploy 3 MW ocean)Oahu resources loaded by economics - no cable Oahu resources loaded by economics - no cableBiofuels for transportation (only ethanol) Biofuels fill in Oahu electricity to 70% (only biodiesel)Low PHEV High PHEV


Hawaii loaded by economics (limit geo to 60 MW) Hawaii loaded by economics (limit geo to 60 MW)Maui loaded by economics (limit geo to 42 MW, deploy 3 MW ocean) Maui loaded by economics (limit geo to 42 MW, deploy 3 MW ocean)Oahu resources loaded by economics - cable from Lanai, Molokai Oahu resources loaded by economics - cable from Lanai, Molokai

Biofuels for transportation (only ethanol)Biofuels fill in Oahu electricity to 70% (only biodiesel); remainder to transportation

Low PHEV High PHEV

Note: Grey boxes have an inter-island cable

Transportation: Maximize ethanol production and use all biofuels for transportation; low PHEV penetration

Transportation: Maximize biodiesel production and use biodiesel for electricity needs on Oahu; high PHEV penetration

Moderate Efficiency ("Maximum Achievable

Potential" from utility IRPs)

High Efficiency

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Summary of results for eight scenarios

Note: All electricity sector numbers are in total installed capacity needed; transportation sector includes only ground transportation.

Example observation: While Scenarios 2 and 6 show similar results, they employ different means. Scenario 2 uses less energy efficiency and requires much more solar capacity; also its ratio of non-dispatchable to dispatchable electricity is 7.4. Scenario 6 relies more on energy efficiency (and is likely to cost less) and has a non-dispatchable to dispatchable ratio of 5.8

1 2 3 4 5 6 7 8Efficiency 220 220 220 220 495 495 495 495Biomass - direct firing 93 93 120 120 56 56 83 83Wind 276 1076 276 1076 223 1023 260 1060Geothermal 102 102 102 102 102 102 102 102Hydro 36 36 40 40 24 24 24 24Solar (residential roofs) 182 182 205 205 166 67 179 179Solar (commercial roofs) 633 633 712 712 578 232 622 622Solar (utility scale) 29 29 29 29 22 22 29 29MSW 77 77 79 79 77 77 77 77Ocean energy 53 53 53 53 53 3 53 53

Dispatchable 271 271 301 301 235 235 261 261Non-dispatchable 1209 2009 1316 2116 1065 1370 1167 1967

Electricity Sector Clean Energy % 46% 65% 46% 63% 58% 70% 57% 70%Oil reduction (million bbls in 2030) 10.0 14.0 11.5 15.5 12.5 15.1 14.0 17.3CO2 avoided (million tons in 2030) 5.1 7.2 5.9 7.9 6.4 7.7 7.2 8.8

Transportation Sector Clean Energy % 30% 30% 57% 57% 30% 30% 57% 63%Oil reduction (million bbls in 2030) 4.7 4.7 9.0 9.0 4.7 4.7 9.0 9.9CO2 avoided (million tons in 2030) 2.0 2.0 3.8 3.8 2.0 2.0 3.8 4.2

2030 End-state for Each Scenario (installed capacity)

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Scenario 8 ElectricityHawaii could reach 70% clean energy in the electricity sector and

reduce oil imports by 20 MM bbl/year by 2030Summary of 2030 Electricity Results

Clean energy achieved 70%

Oil reduction (million bbl/yr) 17.3

CO2 avoided (million ton/yr) 8.8

Mil

lio

n M

Wh

de

liv

ere

d c

ap

ac

ity

16

12

14

10

8

6

4

2

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Scenario 8 TransportationHigh PHEV penetration, local biodiesel and ethanol production

Summary of 2030 Transportation Results

Clean energy achieved 63%

Oil reduction (million bbl/yr) 9.9

CO2 avoided (million ton/yr) 4.2

Mil

lio

n g

all

on

s p

etr

ole

um

fu

el

av

oid

ed

800

500

400

300

200

600

700

100

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Contents






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Negawatt - the cheapest watt of energy is the one never used.

Fastest-growing U.S. energy source (~2.5-3.5%/yr)

Energy efficiency has tremendous potential to reduce greenhouse gas emissions

The U.S. Department of Energy estimates that increasing energy efficiency throughout the economy could cut national energy use by 10% or more in 2010 and about 20% in 2020

A comprehensive set of policies for advancing energy efficiency could lower national energy use by 18 percent in 2010 and 33 percent in 2020.

These policies, along with policies to advance renewable energy, could dramatically lower U.S. carbon dioxide emissions while saving consumers and business $500 billion net during 2000-2020.

Policy Approaches to Advancing Energy Efficiency

– Framework – Priorities, benchmarks, mandates

– Resources – Fees, funding, financing mechanisms for projects

– Green Buildings (72% of electricity consumption) – Codes, standards, energy use labeling

|McKinsey & Company

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Energy efficiency (EE) initiatives are most economical and could drive down overall cost of energy in Hawai’i

3.0 3.5 4.0 4.5 5.0

-100

-150

PotentialMegatons/year

50

150

8.50

-300

-200

CostReal 2005 dollars per metric ton CO2e

-400

-250

-350

0.5 5.5 6.0-200 1.0 1.5

100

2.0 2.5 6.5 7.0 7.5 8.0-50

Hawaii GHG Abatement Curve (Abatement Opportunity : 7.8 MtCO2 and 17.2 MMB)

Process changesFired/Steam

Reduce foulingHydro

Heavy Trucks Fuel Economy PackagesGas recovery from landfills

Residential water heatersLight Trucks Plug-In Hybridization

Intermittent WindConservation tillage

Geothermal

Commercial electronics

Residential electronics

Residential general use lighting

Commercial LED

Commercial T8 lighting

Refrigerators

Cars Fuel Economy Packages

Commercial water heaters

Light Trucks Fuel Economy Packages

Electric motor systems

Non-refrigerator appliances

Combined heat and power

Solar water heaters

Flaring

Medium Trucks Hybridization

Forest mgmt. - active mgmt.

Heavy Trucks Hybridization

Afforestation - pastureland

Manage hot feeds

Biofuels

Forest mgmt. - reforestation

Afforestation - croplandSolar PV

Commercial HVAC equipment efficiency

Dairy cow manure mgmt.

Biomass

Energy recoverySWAC

Composting

T&D loss reductionCars Hybridization

Cars Plug-In HybridizationSolar CSP

Nitrification inhibitorsLight Trucks Hybridization

Abatement cost <$50/ton

Source:Team analysis

ANALYSIS BASED ON $60/BBL OIL

Left hand side (most cost efficient) is comprised of energy efficiency initiatives

Renewables are more expensive and require scale effects

27

Contents






2828

Current Hawaii Grid AnalysisHECO/GE/DOE Public-Private Partnership

Oahu Grid Study Develop power systems model to

understand the economic & performance impacts of wind power.

Kauai Energy Roadmap (Future) Develop a roadmap for increasing the

penetration of renewable energy on the island.

Big Island Energy Storage Demonstration (Future) Develop business case for energy storage

for frequency regulation on the Big Island.

Big Island Energy Roadmap (Future) Consider additional scenarios (biofuels,

microgrid, environmental dispatch)

Big Island Energy Roadmap

Evaluate scenarios to identify the performance of various technology approaches to increase the penetration of renewable energy.

Maui Grid Study

Develop power systems models to understand the economic/performance impacts of wind power & the mitigation technologies needed to increase penetration

Maui Grid Modernization

Deploy energy storage and DSM technologies to reduce peak load and enable further expansion

of renewable energyGE High-Penetration Grid Analyses in Hawaii

Big Island

Maui

Oahu

2007 2008 2009 2010

Analysis

Analysis

AnalysisAnalysis

Demo

Demo

Demo

In progressIn development

GE High-Penetration Grid Analyses in Hawaii

Big Island

Maui

Oahu

2007 2008 2009 2010

Analysis

Analysis

AnalysisAnalysis

Demo

Demo

Demo

In progressIn development

2929

Develop an Smart Grid energy mgmt system to:• Reduce peak load by 15% using DG/energy storage,

responsive loads (coordinated by the ecodashboard)• Mitigate the impacts of variability from wind power

Maui Grid Modernization ($15 million)DOE/MECO/GE

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Contents






|McKinsey & Company

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Utilities increasingly see SmartMeter as the first step in theSmart Grid roadmap – 4 pilots in development in HawaiiSmart Grid roadmap

Customer Products and Services▪ In-home displays▪ One way load control▪ Prepayment

Utility Operations Benefits▪ Meter reading – call center &

hourly reads▪ Integrated connect/disconnect▪ Outage Management – call

center

Customer Products and Services▪ Home automation▪ Real-time pricing▪ Grid-to-Vehicle (PHEV)▪ Vehicle-to-Grid (PHEV)

Utility Operations Benefits▪ Circuit of the future

Cumulative benefits

Time

Customer Products and Services▪ Two-way load control▪ Variety tariff options▪ Solar performance monitoring▪ Home energy management

system

Utility Operations Benefits▪ Fault detection isolation and

restoration (including switches and line reclosers)

▪ Volt-VAR control▪ Generation output device▪ Distributed storage▪ Backup generation

7 - 15 years

Future applications and design

requirements highly uncertain

HigherLower ▪ Uncertainty of requirements▪ Importance of standards

SOURCE: McKinsey

1 - 3 years

3 - 7 years

Automated Metering

Infrastructure

Emerging Smart Grid

Future Smart Grid

1

2

3

HNEIUniversity of Hawaii at Manoa

HAWAII NATURAL ENERGY INSTITUTEHNEIUniversity of Hawaii at Manoa


HAWAII NATURAL ENERGY INSTITUTE

Hawaii Natural Energy InstituteSchool of Ocean and Earth Science and TechnologyUniversity of Hawaii at Manoa






Hawaii National Marine Renewable Hawaii National Marine Renewable Energy Test CenterEnergy Test Center Program Objectives Program Objectives

• Objectives:– Facilitate development & implementation

of commercial wave energy systems for use in Hawaii and elsewhere

– Target – one or more of these system to supply energy to grid at >50% availability within 5 years

– Move Ocean Thermal Energy Conversion (OTEC) to pre-commercialization and conduct long-term testing











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Hawaii National Marine Renewable Hawaii National Marine Renewable Energy Test CenterEnergy Test Center Current Test Sites Current Test Sites











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1. Warm ocean surface seawater boils a refrigerant liquid at high pressure (130 psi). 2. Refrigerant vapor spins a turbine-generator, becomes low pressure (80 psi).3. Cold deep ocean seawater condenses refrigerant to a liquid again.4. Cycle continues -- similar to steam turbine but lower temperature.

Ocean Thermal Energy Conversion

Closed -cycle

Makai Ocean Engineering

Using the temperature difference between: DEEP OCEAN WATER ~5°C

And SHALLOW OCEAN WATER ~25°C











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OTEC Challenges:• Technical challenges

– Large diameter and long pipelines– Low cost, efficient heat exchangers– Large, stable platform and mooring design– Dynamic power cable to shore

• Cost Challenge:– Low cost must be achieved with new materials, better

engineering, innovative designs, while taking advantage of economy of scale and current offshore technology.

Makai Ocean Engineering

Hawaii Center for Advanced Transportation Technologies

• Develop and demonstrate zero emission and low emission transportation technologies.

• Establish infrastructure to support zero emission vehicle operations.

• Create business opportunities to attract vehicle technology companies to Hawaii.

• Facilitate growth of transportation technology industry in Hawaii.

• Secure new funding sources to expand scope of operations in Hawaii.

Hawaii Center for Advanced Transportation Technologies531 Cooke Street, Honolulu, HI 96813

Thomas L. Quinn 808-594-0100 [email protected] www.htdc.org/hcatt

Electric, Hybrid, and Fuel Cell Vehicles

Hybrid electric-fuel cell bus for Hickam Air Force Base

Fuel Cell BusNeighborhood Electric Vehicles

Plug-in Hybrid

Thermochemical Platform

Sugar Platform

BiomassCombined Heat & Power

Residues

Clean Gas

Conditioned Gasor Bio-oils

Sugar Feedstocks

Advanced Biomass R&D

Systems Integration

Fuels, Chemicals, & Materials

Integrated Industrial Biorefineries

Multiple projects underway on Biorefinery research

Algae to energy

<#>

Land

NutrientsAlgal Oil

Waste paper

Sunlight

CO2

Water-

Brine & FreshMethane Gas

Strategic Energy ProductsStrategic Energy Products

Hawaii Algae R&D• Objective: Grow algae for energy products

– Algal lipids (oil), methane, hydrogen

• Major innovation: Non-destructive extraction– Extract lipid from cell without

dewatering or killing algae– Recycle algae to ponds

– Reduced dewatering, nutrient, CO2 costs

– Higher lipid and biomass growth rates

• Inputs: CO2 from flue gas, wastewater, wastepaper

• Pilot plant in Q1, 2010• Production by late 2012

<#>

A Sustainable Energy Future

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a sustainable energy future presentation to boma may 12, 2009

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