 and welcome back to Hawaii, the state of clean energy on Think Tech Hawaii. I'm your host today, Michioen. And today on our show, we've got a great show, we'll be getting an update on the PGV Geothermal Plant after it was shut down because of the Kilauea eruption with our guests, Mike Kelley Keeney, the Puna Geothermal Venture, and Richard Ha, a sustainable energy Hawaii. Welcome, Mike and Richard. Thank you very much. Hello, Richard. Aloha. So let me start with you, Richard. I want to set the context of how important geothermal is for Hawaii, being able to meet its clean energy objectives. So can you give us an overview of why geothermal is so important for us here in Hawaii? Yeah, you know, I've been involved in energy issues for more than 10 years and really quite involved in it. The big deal is that the world has passed the peak of fossil fuel. The credible people that we look at think that this happened in 2018. So we'll be coming down the backside of the oil supply curve. That's pretty worrisome. The other thing is, we happen to be 1% of the whole world who have geothermal at their location. So we're really lucky we have it here. And that's the real reason why we need to get on it and get it done. That's great. So Mike, you're on the spot now. So why don't you go through the history of PGV and how we got to where we are today? And all the good work you guys have done to rescue the geothermal plant from that terrible eruption, which is a miracle that you guys are still there. So go ahead over to you, Mike. Tell us about PGV and your projects. Thank you, Mitch. Thank you. So Pune Geothermal started commercial operations back in 1993 as a 25 megawatt facility. And it was soon evident. It was early on that the resource here was stronger than anticipated. So we increased our contract and our output to 30 megawatts two years later in 1995. And then it wasn't until 2012 where we did another increase in additional 8 megawatts. So it took us to 38 megawatts. And that's our current contractor output levels today. So we've got to mention, prior to PGV, there was the Hawaii Geothermal to HGPA project that the state ran and improved the viability of geothermal as an energy generator. And it was a three megawatt facility. It operated for about six years, I believe. So that was the precursor to Pune Geothermal venture. And so we've been online since 1993, like I said. We have a far push agreement with Hawaii Electric Light. And of course, in 2018, in May, the Lower East Rift or Kilauea eruption started. Of course, I'm certain most folks know that the Kilauea eruption was really started in 83. It just didn't come down the Lower East Rift zone where we are located, right? So what had happened is we shut down. We executed and implemented and activated our emergency response plan. Then we coordinated with civil defense, with the state, civil defense folks, county civil defense. And since then, we were shut down. Here's an update of what it looks like today. If you look above the letter E in venture, that is Fissure 8. It was formerly now known as Ahu Aila'au. That one flowed to the northeast of us. And most of the other fissures flowed to the west of us, the west and south. But this website can be visited. It does have updates, weekly updates. It has a few videos of the project today. Next slide, please. This one here is the roadway that we built to get back on. The river you see in front of us, you can see the cliffs just below the two green structures. That was the river flow path of Fissure 8 that went down to the ocean. And so to the left of this picture is Hilo. To the right is Kalapana. And so we rebuilt the road and started that in December of 2018. The eruption stopped in early August, but it was still hot, a lot of residual heat. And you can see on the top where most of the other fissures flowed south of us. This one is looking from the east towards Maoka. Kilauea is on the top. And you can see the lava surrounding us on both sides. And you can see there's a rig there. We're doing work on our well field. And you can see that the plan was situated on purpose at a higher elevation. And in anticipation that there would be lava inundation, historically there was a flow on the rift zone. The most recent one was 1960. Prior to that was 55. And before that, there were several other in our modern history. So the rift zone, Kilauea is active. Scientists tell us we'll be over this hotspot for at least over a million years. So it's not, yeah, if it's going to erupt again, it's just when. And so we've learned quite a bit from this event. We had to shut down and rebuild. And there's a lot of work. And finally was able to come back online in November of 2020. And next slide. There's just a quick shot of some of our employees on the rig. Next slide, yes. This is like the rig on the left and the rig on the right from an aerial shot. So just briefly, we talked about this, how we situated the location of the major portions of the part plan. And basically, we followed the emergency response plans that we have. And we're able to recover everything. There's a couple more that work that's still in process. But being back online is a huge accomplishment. Another photo from the east looking down. So this is like before and after a Google shot. I thought it was pretty interesting. You look on the left, you can see that we are, PGV is up right there by the word before, an upper left corner. So just for perspective, our area is the facility uses up about 40 acres. We're on 800 acres of lease land, but we're about 40 acres. And then if you look to the right, you can see how the lava just surrounded us. We're surrounded by lava right there. And yes, Mitch. So how close is the nearest house now? Or the nearest, you know, where people are living right now? It looks like all those houses got wiped out. The ones to the south of us is Lanipuna Gardens. The majority of those folks here are covered. Now, to the immediate east of us, the folks along the ridge that we're on, there were at least 30 or 40 homes that were spared also because the lava were on both sides. These were the folks that when we built our road to go back in, we built those side roads so that everyone could go in ahead of the county rebuilding the Kapoho Road. So we were able to help those folks out. And in addition, Helco was also able to use our roadway and our easements to get power back to the folks in there. So it was a win-win for the boys. In a previous presentation you gave recently, you talked about how ORMAT supported your employees. Could you tell us about that? Yeah, good point. You know, within days of the start of the eruption, ORMAT CEO and senior executives flew to Hawaii, gathered everyone for an all-hands meeting and said, look, folks, we're going to keep all of you at least one year. We don't know what's going to happen with this eruption, but we'll just commit it to keeping all of you. And so that said a lot for ORMAT. And everyone was like super happy, at least we had some sense of what's going to go on because it was a scary moment when the eruption first started, a lot of uncertainties, right? And so that commitment from the CEO of ORMAT really went a long way. And again, fortunately, the eruption stopped in early August, but in the meantime, all of our employees were taking turns volunteering in the community at the hub in Pahoa. We're donating supplies to help out folks in need. We also volunteered some of our employees with the American Red Cross. And yeah, so we really, I mean, ORMAT, in my opinion, really stepped up and helped out as much as we could. We also- How many employees do you have? We have 32, we have 32. Yeah, at the time we were at around 30, maybe 31. We did not, ORMAT and PGV said, if you don't want to stay on, it's fine. I think one person left, voluntarily. They wanted to move back to Kona, but otherwise everyone stayed on board. How was that? Did any of your employees lose houses in this event or? We did, actually, we did. We lost two employees, Leilani and Capojo. Yeah, it was unfortunate, but yeah, our folks got impacted just like the rest did. Just like everybody else, yeah. Just like everybody else, yeah. Right. So yeah, so we came back online in November. Like I said, today we're at about 17 megawatts. Our contract is 38. We've been fluctuating between 15 and almost 25, still doing some testing and some adjustments to equipment, but the plan ultimately is to get back to 38. And so we're continuing to gradually increase our output. Just another aerial kind of pan view. I like the bottom one, I like them both, but you can really see how all the lava is around us, right? Yeah, so. Yeah, I'd like to say it's a miracle, but you and I talked about how you selected the site and your plan for this. I'm sure there's miracle is involved also. Yeah, we're so lucky and appreciative and fortunate. Yeah, so that's what we're at today. That's what's happening at PGV. And we're still working on getting back to full capacity. So what kind of challenges are you experiencing right now that you want to tell us about? Well, the biggest, yeah. You can talk about your power purchase agreement and, you know. Well, going back, some of the challenges was just getting the road completed. I mean, going back, you know, the first, I think the first big milestone for us in the restoration and recovery was getting that road in. It took a lot of effort permitting, et cetera, some safety requirements, but we did it. And then it was a big deal to be able to drive back on location. Prior to that, we would fly in because there's no other safer way. That was a challenge. And then of course, getting the transmission lines built again because we had to go to the Public Utilities Commission. So we went through the process. It's primarily Hawaiian Electric, but, you know, we're supportive of that. We need the transmission lines. We wanted to start back up because the current project, PGV, our contract goes still valid all the way till the end of 2027. I see. And we kept all of our other permits up to speed and ready to go in anticipation of starting up when we did. You know, so we're still going through, we're going through some renewals on the Department of Health air permit, also with the underground injection control with the EPA. But that's the normal process. It's taking a little bit longer than it would. It's amazing because we're in the process of renewing the permit. There was a contested case hearing request. And it just coincided with the contested case hearings at Mauna Kea. So ours got delayed. And then we're getting ready to do the hearing again and then the eruption started. So we delayed again and then the eruption is done. We're here again and then we get the pandemic, right? So I don't know if there's gonna be anything else, but it's been exciting. Yeah, yeah. So I also understand you've taken the opportunity to upgrade some of your equipment, so which is gonna make life easier and reduce noise signatures and all that kind of stuff. Do you wanna talk to us a little bit about that? Sure, sure. So we are in the process. There's a proposal at the PUC for an amended and restated power purchase agreement. And by the way, this is something that PGB and ORMET was working on even prior to the eruption. So all along we had this initiative because the existing power purchase agreement terminates at the end of 2027. We have this RPS goal of 100% by 2045. We wanted to start moving the process along to extend so that we can participate and continue our operations. So the amended and restated power purchase agreement was submitted by Juan Electric Helcoe to the PUC at the end of 2019. The four key elements of this proposal is one, we would blend the two existing power purchase agreement into one single comprehensive power purchase agreement. In addition, it would extend the term so that the facility can operate till 2052. It would de-link all pricing from oil. And then ultimately, as you mentioned, it would allow for a repowering of the project, meaning we would install three new, much more efficient generating units and replacing the 12 generating units that we have today. And like you mentioned, because you have less rotating equipment, noise will be reduced substantially. The piping connections, which flanges and valves also are reduced substantially. Thus, yeah, reducing the potential for geothermal emissions. So it's like, you know, all around it's this and the pricing dealing from oil is gonna be the lowest energy rates for our facility. And we're just, we're going through the process at the PUC right now. There's going through the steps to see what we can do about getting approval on the PPA. So when you're back up and running to your full power that you want, you know, what's the percentage of the big islands electricity that's supplied by PGV? Yeah, good question. Prior to the eruption, we were contributing 31% of all energy supplied to the grid. And Hawaii Island, of course, was almost 60% in 2018, relating all the different counties in terms of renewable. And we were the 31 of the 60%. It was actually 57, I believe, right there. But that's at 38 megawatts. You know, one thing I did not mention is that the proposal with the three new units will utilize the same geothermal resource that the 38 megawatt facility today utilizes. But because of improved efficiencies, it'll result in an eight megawatt increase. It'll go up to 46 megawatts. Okay. So we're looking at closer to almost 40% renewable contribution once we can get there. I was talking to somebody from Helico not that long ago, and they said like during the day when, you know, with the winds really going and the sun's out and geothermal is up and running, we're about 83% renewable on the big island. It drops down at night when to around, I thought he said around 55% or something like that because, you know, the sun's not shining and whatever, mainly because of the sun. So that's pretty significant contribution to our goals of getting to, you know, this 100% renewable by 2045. Right. Yep, yeah. And, you know, there's some proposals that's out there for additional solar and energy storage that's looking to come online. Right, right. So Richard, how about jumping in and talking a little bit more about geothermal and its, you know, value to the big island? And maybe let's talk about sustainable energy in Hawaii and, you know, what you're all about there and how we can support geothermal. You know, sustainable energy in Hawaii entered the docket a year ago, January. Right. During that time, we said that there was a question and the question was, well, essentially they were asking, how come you folks are wanting to participate when the consumer advocate can take care of your issue? What we told them was, we commented from a different point of view. We commented from a biophysical economic point of view, which is basically physical science and ecology. So as opposed to, you know, economics from a social science point of view. We're looking at a scientific point of view. And what that does is it allows us to project into the future and quantify stuff more accurately. So that's why we entered. And so we've been participating. And that's what SC Sustainable Energy in Hawaii is doing. So the main big thing that is on our minds is the fact that most people don't realize, you know, we know about climate change. That's common. But right. Alongside is the decline of fossil fuel. And we happen to have geothermal and we want to, you know, move it forward as fast as we can. Because we really don't have that much time that we think we. So that's our interest. So we've seen on the mainland, just in the last week, what happens when your oil supply is disrupted. So you want to talk about that a little bit? Well, I'll put you on the spot. You know, that pipeline that got hacked by the Ruskies? Or? Yeah, you know, and that's a good point because you see right now, PGP is located on the east-west coast. And we need more geothermal. It'll be part of us to diversify so that we won't get caught like what happened on the east coast. Yeah, straight out of this. Because there's geothermal resource on the other side of the island, all the way from South Point, all the way to Monterey, the base, there's a lot of places. But I did want to mention something real important. And that is we have, at the University of Hawaii has this organization called Hawaii Long Water and Geothermal Resource Center. And they're actually under you because think about it, what can be more important than water and geothermal? Yeah, so it could be funded more aggressively. You know, we should by now have had tested wells ready to go. We don't have one. You know, so that's what we want to do, yes. Well, I love geothermal because originally I was going to install an electrolyzer at the geothermal plant. I like it because it's 24-7 base load power. So, you know, here has the, you know, the financial walks like to say, you know, it's great capital utilization. And we went through, you know, quite a long process to get it approved. But we did and no sooner would we ready to sign the deal. We're ready to sign the deal is when we had that eruption in 2014. Remember that one? It came in 2015 and got really close to coming to Pahoa. It was like, you know, 100 yards away from the main road. So, yeah, yeah, yeah. But, you know, from the point of view of my projects, you know, that's the, and for Hawaii, it's not just my project. It's for Hawaii is being able to have that resource and to use any kind of extra energy to make hydrogen instead of curtailing it, which is really wasting electrons. So, that's a big deal for me. And you know, Rich, to add on to that, you know, PGP and ORMAT, we are, you know, definitely would be interested in pursuing that again once the moment is the best time, right? You know, I mean, like you said, we're ready to sign off on the agreement. We're going to do that test that project. And then, yeah, the eruption came in crazy. Yeah, little did we know that was just a teaser, right? That the big one was waiting to let it rip. Bench, you know, I'd like to add one more thing. Yeah, please. And that is, you know, one thing that we can do is set up something like what they have in Iceland. Iceland has a geothermal resource fund where, you know, where people can come in and want to do a project. They can borrow money from that fund. And if they're successful, they get to pay it off in 20 years or whatever it is, if they're unsuccessful, they write it off. So there's very little risk for them. They already know what's going on, yeah? So we can do the same thing on this island, set a geothermal resource evaluation fund in the county and use it as a receptacle for the grants and private funding, you know, all that kind of stuff. And you know, the geothermal piece of royalty, that royalty is not used for anything to develop geothermal. So how much money is that? I mean, what kind of level of funding is that? Is a royalty stream, you know, approximately round numbers? Yeah, it's a few million dollars annually at full contract. Like for example, yeah, 2018, it was probably around two and a half million dollars. And how is that split up? I mean, some of it goes so far. Yes, the state, the state retains 50% because the state has claims to the mineral rights for geothermal. And then Office of Hawaiian Affairs gets 30% and 20% is to the county of Hawaii. Okay. Well, it sounds like that's something we should be looking at. So I like that idea, Richard. So that's something with sustainable energy in Hawaii could be pushing. So believe it or not, guys, we've almost gone through our whole half hour here. And so I think it's time for me to sign off. But I'd like to thank Mike for coming here and giving us a great, awesome photographs. Man, I was blown away by your new photographs. They're really, really beautiful. And thank you for all you're doing to help us get to our renewable energy goals. And thank you, Richard, for all you do with Sustainable Energy Hawaii and the whole Sustainable Energy Hawaii team. And so this is Mitch Ewan signing off. And I'll see you next week with Hawaii, the state of clean energy.