 the state of clean energy. I'm your host, Mitch Yuan, our underwriters, the Hawaii Energy Policy Forum, and that's a program of the Hawaii Natural Energy Institute. I'm very pleased to welcome my good friend and our guest, Riley Sato, of the County of Hawaii R&D Department, and he's gonna tell us about the Big Island Hydrogen Shot. So Riley, welcome to the show, and let's start off by telling us about the US Department of Energy and the hydrogen shot and how the county became involved. The US Department of Energy issued and clarified regarding hydrogen and how to advance the production and use distribution of hydrogen worldwide. And we took a look at, because we're leaning forward, toward hydrogen with the project with HNEI, we took a look at the questions and the information that they're looking for and felt we had a pretty good content and to answer those questions as we were moving along in that direction down that path. And so we worked with HNEI with Mitch and submitted a response in early July and evidently a little island state in the middle of the Pacific Ocean caught their eye and they then invited us to be on a panel at the hydrogen shot summit and at the September 1st, to actually present our approach and to hydrogen and how we can actually move it forward and scale it and be economically viable. Well, that was great. And you were down selected from like over 200, 250 submissions, I think. And this was international and went worldwide, correct? Right, yeah. It's really interesting. And what time was it? Five in a morning. There you go, you see what we do. So Riley, we're very privileged to have your slide deck which is, we can use for this show. You can take us through your presentation and elucidate us on the hydrogen shot for the state of Hawaii and for the county of Hawaii. So let's pull up the first slide which is a title slide, but it's one of my favorite pictures because it's our, the HNEI hydrogen station at Nelha. So over to you Riley. Yeah, so this picture is that it's not a concept drawing, it's a real picture. The hydrogen production station is up and operational. Not only does it produce hydrogen, it dispenses the high, you know, Nelha on the corner side of the island. And so we are, we have, I'll refer to it as the chicken right now and you can go on to the next slide. So just a quick background on Hawaii County. I provided this because, you know, it's an international conference and not everyone really understands Hawaii County versus Hawaii State versus Hawaii in general where it is. And then policies, a framework that enables us to advance toward hydrogen economy, why hydrogen and what the next steps are. Next slide. So Hawaii County, big island. And this might be very informative for many people in the state. It's a Hawaii County's 4,000 square miles with an average elevation of 3,800 feet. A population of over just slightly over 200,000. Now, the median household income is 57,000, approximately 57,000 for Hawaii Island and the state average is paid up. So you have more than 55% of the current census data. I've updated that since but it's 55% of the island households are either Alice, which is asset limited income constrained employed or in poverty. And so this really is an important profile of our community that we need to serve. Next slide. So interesting fact, we have 200,000 people and we have 200,000 registered people. So every man, woman, child, baby in the store has a vehicle registered. So what that leads is to an annual cost of ownership, the financial burden of ownership of vehicle, which is about $8,000 a year, which results in spending on a vehicle ownership of $1.7 billion a year. And that's just for our island. Next slide. Now I bring this in climate environmental justice piece of this because in transportation, it is the largest percentage of greenhouse gas emissions, partially because of the size of the island, partially because the workforce is far from, located far from the actual workplace, over 37% of the population travels more than 50 miles one way to get to work. Wow, let's hear it. And so it results in a high level of greenhouse gas emissions related to transportation. And I think Oahu is more like 37%. I think nationally it's like 26% where over 50%. Next slide. So we have a framework that has enabled us to move forward. It started way like in 2006, I think with HRS 19610, you actually go to the language it points to Hawaii Island transforming to a hydrogen economy by the year 2020. And we're not there yet, we're working on it. You're pretty good. We're towing a lot of it. And then the game-changing pivot toward advancing, accelerating this process in transportation is a June of last year, HRS 3642, was put into place, executed into statute, which allows the third-party financing for vehicles, vehicle fleets, fueling and charging infrastructure. And so this really sets it up where government agencies, I think 16 government agencies are allowed to actually utilize this transportation as a service or mobility as a service. And I'm sure some of you have heard about the Department of Transportation 50, 45, 50 Teslas coming in and that's a result of this statute. And currently Hawaii County is working on a much broader long-term, 10-year, 12-year rollout of replacing our vehicle, utilizing this statute. So how does it work, Riley? Well, let's say you have a bus fleet or a vehicle fleet and the third-party financier, sustainability partners, they own, they maintain, and in some cases they will ensure the vehicles. And the vehicles themselves are compensated back to the financier on a per vehicle mile basis. So as long as the vehicle is rolling every day, there's a payment to sustainability partners. So the vehicle has to keep rolling. So that's why sustainability partners has an interest in the maintenance. Now, it not only includes the vehicles, but it includes the fuel and charging infrastructure so that you can actually transform, say, a base yard whose there are emissions and install photovoltaics and batteries and fuel cell generators powered by photovoltaics and all through sustainability partners of capital and pay for it over a 10 to 20-year period. So in the case of, but you're getting a year one with no capital confusion, but you have the use of the vehicle and clean energy transformation occurring immediately and being paid for over 10 to 20 years. So you can make giant leap forwards with this. So like traditionally you were acquiring, let's look at buses, for example, like you'd buy one or two buses a year if the budget was good, if the budget wasn't so good, you might delay buying a bus for a couple of years. And that's kind of how the Big Island bus kind of spiraled in a little bit to where we have a limited number of buses. But this program, as I understand it, can allow you to make that giant leap. So technically you could put it in order for 40 buses. Could you not? Right, and that's what we're developing right now down to the model number of what our current fleet is going to FDA regulations. You have to maintain ownership of that grant funded vehicle for X amount of years or X amount of months. So we have them analyzed by model, link and model what year they retire. And so we can actually model, make an offer for 40 buses replaced over a seven year period based on the retirement of the assets that we currently have. And that is what we're doing right now. So I'll talk to us a little bit. I'm not sure. Talk to us a little bit about your ideas for producing hydrogen, if some of these buses are actually hydrogen buses. So what's the kind of concept you have? I call it taking advantage of the kind of advantage of previously bad behavior now becoming actually a blessing in disguise. So with one example, the landfill gas from West Hawaii and East Hawaii could be converted using the heat energy from the landfill gas to produce electricity that could produce hydrogen. And so currently we flare in the West Hawaii landfill approximately 270 cubic feet of gas per minute. That's 24 hours a day. And there's a lot of heat wasted, but it's EPA compliant. We have a cold start from EPA. No variations from the law. The statute we're right on because flaring the methane reduces the carbon output by 28 times. So the EPA says great, great job. Now, if we take that and we use that gas for operating a landfill gas generator, you can produce enough energy to produce enough electricity to produce 1,000 kilograms of hydrogen per day. Now, a bus gets about 10, 12 miles per kilogram. So you're talking about 12,000 bus miles a day, which can for about 3.5 million bus miles a year. And that would cover the entire fleet operating on its current designated routes and schedules. So from the landfill gas, which we're flaring, all that energy is wasted right now. We capture that, convert it to fuel for the fleet. And the same, the Hilo landfill is leaching methane. According to EPA standards, this cap is unlined, but the methane, they are in the liner, the capping liner, they're cubes that allow the methane to escape based on the metric tons of biomass that is in that landfill. For 30 years, it'll keep, I'll call it burping, but it burps the gas, right? So we would install a gas capture system, an active one, and then convert that gas to electricity. And that could run probably estimates of 1.6 megawatt generator, up time 90%, 365 days a year. And that could produce 2.1 million bus miles. So now we have the bus miles actually covered by the West Hawaii landfill. We can now power all the tractor trailer trucks that we use to haul our trash to the landfill. So that's the type of, and that's the type of things that we're looking at. So let's talk a little bit about capital utilization. So traditionally, I think you worked out some statistics that we only use the vehicles like maybe 33%, 35% of the time, and the rest of the time they're parked. So how can we make better use of that capital that's now being supplied or the capital is being supplied by sustainability partners? You wanna comment on that? Yeah, ideally, and this is a lot more complicated, but it serves our community in the right way. So if we take the county fleet and we have our diversified locations in which they're parked overnight and on weekends and holidays, that those vehicles are available and provide access to mobility for our low income family. Either through some type of a subsidy and or the vehicle would be shared use. Right now, there's like 116, 117 days out of the year weekends and holidays that the vehicles would not be used. And from 5 p.m. to 7 a.m. Monday through Friday. Right. So that is something like 30% of the time where it's the vehicles are idle. And so right now, what we're looking at is improving the utilization of the vehicles even through Monday through Friday by sharing the use amongst departments but then also having it available for accessibility to mobility for our community. Now, the other way possibly, it could be funded is through public charging at the county charging systems throughout pools, parks, tennis courts, things that we would stand up, refueling renewable energy systems that charge our vehicles Monday through Friday but at night. But on weekends and holidays when the other activities are occurring with the vehicle, they're not charging. And so the public could actually use the charging space. That's really cool. So talk to us a little bit about how this is being funded by the county. Sustainability partners has to be paid. I mean, this is not free. So how do we go about paying for that and what gives us the confidence to enter in that kind of a financial arrangement with sustainability partners? Well, the key is that the arrangement with sustainability partners actually saves money. So you're not exposing, you're mitigating future risk of oil prices going up. I just checked today, diesel fuel per gallon in September was $3.10. Today, in October, it went up to $3.39 a gallon. Yeah. And that's without fuel tax, is where the government, so we're getting it at a lower price because we're not paying tax to ourselves. And so it gives you that if we put in the infrastructure, it's a renewable source. Energy is produced on island, consumed on island pretty much at the point of production. So you have very little infrastructure of moving energy molecules like you do, having an oil freighter come from Indonesia, we refined in Honolulu and shipped to Hilo then truck one. So that all of that provides a margin of saving. So as far as funding, it should not increase what you already are providing in resources, but actually should stabilize Laura and stabilize. Well, how about the half a percent of GET that was applied to the counties now to emulate or copy or bring us into line with what's going on at Oahu where they're charging a half a percent that goes to the rail system. How does that factor into the big island? Well, a portion of that is going to mesh transit, but if we did nothing, if we just forget about all of this, it would go into diesel buses. Right. And have yourself exposed to fossil fuel prices and higher maintenance costs because of the 3,000 moving parts in a bus. Right. And replace your... See, and without sustainability partners, see that allows you to actually map that out 40 buses, 50 buses with the actual Federal Transit Authority grant program. There's really 304 buses a year that possibly you'll get a grant for. Yeah. 203 zero emissions bus. And so by the time we would get to the optimal 57 buses zero emission, it would be, I don't know, what year? 24 years or something. And then you're disposing buses behind that, right? So it's like... Yeah, correct. So all of this is going to support a enhanced public transportation system for the citizens of the Big Island and to make their life a little bit more affordable. Right. That's it's cleaning emissions and really moving away to a more open spoke according to your mass transit master model plan, a multimodal master plan from August of 2018. Right. So we're in the process of implementing that going through less scheduled fixed routes but like having within a mile of the route, if you're within a mile of route, you get a transit transportation to the route at no charge. Right. Those types of programs are what will work out. Awesome. Great. So let's carry on to the next slide and we're making good time here. Ah, yes. So this looks familiar, Helmut. So the hydrogen station, see that's the chicken. Because they always say hydrogen is a chicken and egg thing. You need the vehicle, but you also need the fuel. And the fuel is the chicken. And so Mitch is gonna be shipping within a few weeks, the egg, the hydrogen bus. And so the fuel from its production station can get to the consumption point of the bus to the hydrogen transport trailer. And so wherever you produce hydrogen, the same infrastructure that moves propane, you can see a propane truck could be filled with hydrogen. It's a movement of gas with energy that has energy. And so since the county, we have the landfills as a potential chicken and we have our fleet in mass transit and tractor trailers as the egg, we have somewhat control over the handouts. And so this is kind of what I was talking about of the capability of hydrogen to be moved to the point of consumption. And so not all your, you're not tied to, like with a battery electric infrastructure, you set it up and it's anchored there and all vehicles come to the, where they can get fed. So like Costco gas station, right? Everybody goes there, right? Exactly. So battery electric, that's what you end up doing is all vehicles come to the charter. Right, so this, the top photograph shows a dispenser that we have installed at Nelhoff. But we have an identical dispenser and all the ancillary equipment sitting in crates. And we're looking at, not looking at, we're planning to install that at the mass transit agency base yard in Hilo. And we've already done a conceptual rendering of it. Now the next step is to get the engineering drawings done so that we can, we still, even though we're working for the county, they still have to get permits, which was a surprise to me, so, which is really good. Hydrogen, it works for the big island, partly because of the challenges of the island being real big and with the topography. It's a zero emission solution to begin with. You can move the hydrogen to the point of consumption where it's needed. So you can have diversified production, you can have diversified distribution. And currently the numbers of more capital standing up and advancing capital improvements to produce the hydrogen is numbers are coming out very cost competitive. And each day the fossil fuel goes higher, becomes a greater savings to actually move hydrogen. All right, next slide. We're going to move it along a little bit now because we're about five minutes to go. Yeah, so landfill, these are such, I talked about landfill is geothermal. Geothermal in the crazy vision, 20 years from now, geothermal could actually produce all the airline fuel necessary to operate all the airlines in the state. And it could be produced on this island through a carbon capture hydrogen technology. So, but we'll start with the one bus and we'll get there. And of course, there's other green sources, wind, solar, inline hydro. We're looking at any kind of infrastructure in water, using the fall of the land to actually produce electricity that could run an electrolyzer that produces hydrogen. All right, so let's go to the next slide which was one of my favorite slides that you guys did. Yeah, so this is a hydrogen, if you look at the lower left hand side, you see other sources of energy. And these, this will take a set of new, it's a new set of technology with workforce development requirements and training and education. So the actual hydrogen itself, like I said, it can be stored and move so we could diversify where the workforce is actually operating. The other thing I forgot to mention, hydrogen has an unlimited shelf life in storage, unlike batteries and unlike diesel. Diesel, you have to run and burn it after six months or it'll go bad. All right. Same thing with propane. So anyway, then, so in essence, what we're doing is transforming a lot of our mobility technology and with starting with the fuel and the equipment and we'll need to develop a technical center or not necessarily one place, but it'll become the way of which we develop workforce. It'll be higher paying jobs, more technical in nature and it'll be, it can be diversified in location. So these are our next steps, DOES, how they can help. And we're looking at funding sources in addition to sustainability partners for the vehicles, but if we can stand up, emergency resiliency through fuel cell generators being diversified in its locations at our community centers and we have the hydrogen there to produce electricity, that would really make the hazard mitigation advance that and part of our community emergency facilities. Then we look at our mobility, transportation, including airline, including Marine, which everyone's afraid to talk about, including Marine and move forward. And it'll be produced in a green manner from the various sources. Well, there you go. I think we're at the end of our time, Riley. It's been really great of you to come and give us the vision and how we're going to accomplish it. So you've done a really good job and the fact that Big Island I was selected to present to the whole world, this concept is fabulous. And I would like to think that this positions the county well for some of this build better funding that's coming and infrastructure funding that's coming down the line because we're not shovel ready, we're actually shoveling. And we have a real live projects and the county has got the right regulations and programs in place. They've got identified our share of the money and we're basically ready to go. So we're ready for some of that DOE money because they're going to have a tough times I mean that getting all those billions of dollars out the door. And so this is something we have to go after. So Riley, thanks so much. I'd like to plug for Riley. He's the one that developed that whole transportation services contracting concept. So well done to you. So anyway, that's so we're going to leave it there now. You've been watching Hawaii, the state of clean energy on think tech Hawaii. Today we've been talking about the county of Hawaii's hydrogen transformation vision and plan. And we'll be back in two weeks and thanks to our viewers for tuning in. I'm Mitch Ewan, aloha.