 Oh yeah, that's right. 220. Okay, we're going to go. We'll go to the floor. This is Think Tech Hawaii. Community matters here. One. Bingo! We're back. Four o'clock, our flagship energy show. I love energy. We should all love energy. It's like nourishment. That voice over there is Sharon Moriwaki. She's the co-host and co-chair of the Hawaii Energy Policy Forum. And she loves energy. And to my left is Shannon Tangadon. She's from Hawaiian Electric. She is a spokeswoman from Hawaiian Electric. Thank you for having me. We'll talk about the Hawaiian Electric report, if you will. Okay, and Jeff Ono, former consumer advocate and now in private practice as an energy attorney. Is that a fair statement? Nice to have you here. Our special guest today. First we have to have the Hawaiian Electric report. First thing I want to ask you about is grid modernization. What is it, and where are we? Well, our grid modernization strategy was approved by the PUC last week, so we're very excited about that. I can see the champagne bottles. Yeah, yeah. We're celebrating going on. So that entails our near-term plans for updating the grid, making it more resilient, more renewable-ready. So what we have is a six-year plan that includes everything from, you know, strategically placing advanced inverters, smart meters. It's just an array of technology. A cornucopia. Yeah, a cornucopia of technology. Good work, good work. And what we're trying to do is, you know, update the grid, make it renewable-ready, make sure that we have everything in place so that, you know, the grid really was meant for one-way flow, you know, energy going out, not this two-way flow that we have now with all this rooftop solar. So we really just need to update the grid, make sure that it's, you know, ready to take on more renewables. Yeah, this is very important. And so when can we see signs of this? You say six years. What happened first? What happens first in the six years? Well, first, well, at first, we really just need to get our planning, our implementation plan in place. And that needs to be given to the PUC by March 1. And so we have that deadline. And so that kind of gives, you know, our step-by-step, you know. But March 1 is coming right along. It's coming right out. So, yeah, there's a lot going on. So what did they approve, Shen, and if the plan comes in March 1, what was approved? The just overall strategy. Just like these are the steps. And, you know, this is the type of technology that we're going to be using, you know, advanced inverters, you know, we're going to be, the communications updates and stuff. So everything comes together, and it's sort of a roadmap. So the implementation part comes next, you know, where we have more specific information, timelines, the cost. Who's going to do what? Yes, exactly. And how it will work for all the companies. Very exciting. It is very exciting. Because in order to move ahead with all this and, you know, reach the deadline and all that, 100%, we have to do this, right? This is an absolute requirement to do that. It is definitely necessary. You know, our grids need to be updated. How's it going to change your life, Shannon? How will it change mine? Well, I'll just have more to talk about as far as technology. Exactly. I need to really read up on all the technology. So you have to come back and give us reports from time to time about how it's doing. Yes, it is. You have to start with, you know, when they approve the plan that you're, the implementation plan you're submitting on March 1st, yeah. Okay. So then we got RPS. What's happening with RPS? Renewable Portfolio Standards. See, I know what it means. Well, we're excited. It moved up. It bumped up from 26% in 2016 to 27% in 2017. Renewables overall. Out of 100%. Renewables overall, exactly. And so... And that's for the three islands. I mean, the three counties. Yeah, it's consolidated. Yeah. For Hawaii Island, it went up 3% for 57%. Wow. Maui dipped a little, but that was because there was less wind energy being sent to the grid. Yeah. We took 95% of what was available, but it, you know... So what you're saying is the curtailment was only 5%? Yes. Is that right? Yeah. So... But Maui does have a fair amount of wind, though. In fact, Hawaii probably has... Am I right about this? It has as much wind as any island does. Yeah. Yeah. It's just strong wind. I mean, Kauai, yesterday, David Bissell at the Harvard Club, he said, we're not doing wind. They cannot. Zero wind in Kauai. Why Kauai? Yeah. They're concerned about the bird kill. Oh, okay. Yeah. And the way the ecology is set up in Kauai, the birds are a concern. But Ulapalacua is a big thing, right? Yes. In West Maui, you get a lot of wind there. Yeah. So, I mean, it's just that there was less wind overall last year. I mean, as a phenomenon, the weather. As a phenomenon, yes, last year in the weather. Wow. I wonder if that's related to climate change or maybe El Nino? I'm not sure. El Nino. Yeah, we'll find out. We'll find out soon. That's for next episode. Yeah, well, next episode. I mean, El Nino is this year, you know. Expect surprises on that kind of thing. Okay. And what else? What did it find for, I don't know, to recover all the islands? Yeah. Oahu, 19%. In 2016, we went up to 21%. Okay. In 2017. Sounds like we're on the track here. We are on the track. And, you know, we're excited because we have a lot more renewables, large scale projects on the way. And then we also are implementing programs so that we have more private rooftop solar. So we're making our way, you know, forward. Yeah, I had a show with Marco Mangelsdorf this morning, and we kind of agreed that you need both. You need utility scale, solar with storage, and you need private homes, solar with storage. I mean, ultimately, you can't have just one, not the other. You've got to have both. For robust, resilient system. Yes. Okay. And the third thing was the RFP business. I say business. I mean, I, you know, request for proposals. What do you got out there? What's coming back? Well, we're asking the commission to approve our request for proposals. We really need 220 megawatts for a generation for Oahu. We want 60 megawatts for the island of Maui, and 20 for Hawaii Island. More than is now. More than is now. And this is all renewables we're talking about. All renewables. And we're not specifying what type of renewable. Be anything. Be anything. Come one, come all. Yeah. Give us your tired, huddled, renewable developers. Yes. And we'll talk to them. Definitely. I think, you know, we just need to get started, because if we want to reach these goals, we really need to get this proposal, this process started so that, you know, we can get development going. Yeah. This is a big leg up, isn't it, to have this much more renewables on those three islands. Definitely, definitely. And, you know, we're moving forward. And I think, you know, it's just an exciting time to be at the utility. Yeah. Well, on that very point, Molokai, the deal was made and was it approved? Yeah. In Molokai, the, I forget the name right now, the solar battery. Yeah, solar plus battery. The Half Moon Project on Molokai. So that happened. That's actually going on. That is. That project is going forward, you know. It's great. It's great. So little by little. Yeah. Molokai's gone on its way, for sure. There's a lot of progress. Well, this will change things. Yeah. Because right now there's no utility solar there. It's just utility diesel. But there's a certain small amount of regular, you know, photovoltaic there. Yes. This is going to change that picture. Definitely. It's going to be a significant amount of photovoltaic and storage. And storage. And that's what's happening, isn't it? That's the direction we're going. All this tells us it's photovoltaic and storage. Yes. There was an article last week in the Wall Street Journal telling me that really was very interesting. And next era, remember that? Next era is building these facilities in various cities on the mainland with like 100 megawatts at a time in solar and storage. And so, you know, we're not the only ones. We have to show them we're ahead, though. Definitely. Yeah. Okay. What do you want to add? Then we're going to move on. What is your message today, Shannon? My message today is, you know, really we're marching forward. We're getting all these, all the pieces in place to get to 100% renewables. All right. Yeah. We'll be watching it happen point by point. Questions? Very good. Comments? I think it's great. Yep. No, I think that's a perfect segue into our discussion on biofuels. Yes, Shannon. Was that in mind? We're going to take a short break. Thank you, Shannon, for coming down. Thank you. Thank you, Shannon. Tanganon of Hawaiian Electric, a spokesman. We're going to take a short break and then we're going to go to our main case in chief with Chef Ono and Sharon Moriwaki. Yes. Looking forward. Looking right back. This is Think Tech Hawaii, raising public awareness. I'm Ethan Allen, host of Likeable Science on Think Tech Hawaii. Every Friday afternoon at 2 p.m., I hope you'll join me for Likeable Science, where we'll dig into science, dig into the meat of science, dig into the joy and delight of science. We'll discover why science is indeed fun, why science is interesting, why people should care about science and care about the research that's being done out there. Great. It's all entertaining. It's all educational. So I hope you'll join me for Likeable Science. Okay. We're back. We're live. And guess who? That's Sharon Moriwaki, co-host and co-chair of the Hawaii Energy Policy Forum. And, Chef Ono, a former consumer advocate and now a private practice attorney in energy. So nice to have you here. We're going to talk about bioenergy in Hawaii. What is the status of bioenergy in Hawaii anyway, Jeff? Well, you know, we're moving along. Hey, there you have it. Well, you know, and Shannon was here talking about the increases in the renewable energy to the RPS and how much Hawaiian Electric is doing in renewable energy. But much of it is variable renewable energy. It's solar and wind. So those are not available on a, you know, as needed basis. It's available when the sun is shining, when the wind is blowing. Except if I have storage. Storage. Storage will help. But if you have long periods of cloudy days, like today, for example, or several days, then the batteries will discharge and there will be nothing to charge them again. And then you have nothing. So there's still variability, even if you add battery to solar and solar farms. Which brings us to this discussion on biofuel, because biofuel can provide firm dispatchable energy to Hawaiian Electric or to our island grid. And that's important for resilience, for reliability. The electric utilities need to be able to call on firm power when they need it. So the question really is, where does it fit? You know, imagine a landscape where you have certain kinds of demand here, this kind of thing, this kind of facility, property, whatever, company. And this kind over here, different, not the same. Where does the biofuel thing fit? For example, I know Hawaii... Hawaii... Joe's group. Bio... Which one? Hawaii bioenergy? Yeah. It's Kelly King and all that. Oh, Pacific biodiesel. That's Pacific biodiesel. You know, they're servicing the airport, right? They're providing biofuel to the airport, in the airport for the airport functions, right? They've got a contract for that. They have a contract for the emergency generator at the airport. And they've also signed agreements with Hawaiian Electric to provide on a spot basis biodiesel, biofuel, to be used at... There's a new scofuel generating station that's being constructed right now. That's supposed to run on 50% biofuel. So Pacific biodiesel is going to provide at least some of that biofuel. So they're doing very well. Their feedstock is generally made up of used cooking oil. And there's a limited supply of used cooking oil in the state. This means we all have to go to the restaurants more often and eat more. Eat more fried food. Deep fried food. French fries would be very good for this. There's stuff they tell you not to eat anymore. Well, you know, think of your greater obligation here. So why is that kind of legal? Certain kinds of facilities and functions are better suited for biofuel. Am I right? I mean, what's the general rule on that? Well, at today's technology, yes, certain functions are better served with biofuel or biomass to replace the current fossil fuel-driven units that are on the system. I mean, that's the idea is, you know, because these functions are being served right now by fossil fuel-driven plants, we're trying to replace those plants with renewable energy. But when you replace plants, these old steam generators, you lose a certain amount of reliability, resilience to the system, because they provide certain functions that these variable renewable energy sources cannot provide. It's a migration. It's kind of a migration. Well, it's part of moving toward 100%. If we're going to move to 100% renewable energy, we've got to get rid of the fossil fuel plants. And biofuel is not fossil fuel, biofuel is biofuel. It's a renewable for sure. So looking down the pike, I know Sharon wants to ask you this question. Looking down the pike, at the day of 100%, where there's really champagne and corks are popping and confetti, how much of that is going to be biofuel? If you look at Hawaiian Electric's Power Supply Improvement Plant, a fairly significant amount is going to be biofuel. But they're looking at it in terms of what technology is available today. Maybe in 10 years we're going to have hydrogen or some other source that can replace that. But for now, in terms of technology, it's biofuel biomass. So I want to go back to the theme of today's show, which is the regulatory scheme. And what is that the reason why this is so important to have biofuels that we have so little locally produced? Where is the hang-up? What are the challenges? And what can we do to make more biofuels? So let's talk about it. When we talk about biofuel, there's two types. One is biomass, where you take a plant material. Yeah, or H-Power, something similar to that. You take a plant material and you put it into a boiler and you combust your plant material and it generates heat, it boils the water, creates steam, you pressurize the steam, it drives the turbine and you generate electricity. So that's what we're doing on Kauai, which is right now that's doing pretty well. The green energy facility is a 7 megawatt plant on Kauai that is selling energy to KIUC through a power purchase agreement. They are burning albezia, but they're eventually going to run out of albezia trees, and so they are looking at cultivating eucalyptus and some other types of plant material that they can burn in that furnace. That's a proven technology, it works. It's an old, I mean, 50, 100-year-old technology. All of the sugar mills used to burn the gas and they generated electricity to run their own sugar mill and what excess they had they sold to the electric utilities. So it's tried and true, biomass technology is tried, but it's expensive to produce. It's still very expensive. Wouldn't technology make it cheaper? There have been technology advances in terms of the boiler technology. Some of the control systems are much better than in the old days of the sugar mill. But just the cost and the feedstock cost, right now a biomass plant is going to cost more to generate electricity than an oil-driven plant. Today's dollars. So why is it going to be priced out as we go further toward 100%? I don't think so, and I think part of it is that we are going to see oil prices rise, where it's going to be. Right now, I think, I checked today, oil is at $65 a barrel. Well, actually it came down. It had hit $70 and it dropped back down. What's your prediction? I think it's going to be somewhere around $70 to $80 over the next five years. Those who are in the know say that because of unconventional oil in North America, oil prices won't go up worldwide more than $70 to $80. What happens in 2020 when the international maritime organization changes the sulfur content for marine transportation? Low sulfur fuel gets more expensive. It might drive up the cost of low sulfur fuel oil that Hawaiian Electric uses. That will create a problem. So going back to, I do want to get back to the regulatory environment, but going back to the whole thing about costs, I'm pretty sure that the cost of photovoltaics, notwithstanding the tariff, the tariff is the kind of bump in the road here, the Trump tariff against the Chinese, but ultimately the technology will reduce the cost of photovoltaic and improve the efficiency of photovoltaic and likewise for the batteries. I mean, this is coming because there's so much focus on it, so much research going on. So many people around the world are trying to get in on that. So doesn't that mean that biofuels will be priced out? I don't know if that's necessarily true, and I think there's still a role for biofuels to play in the system. And this is an engineering term that I never fully understood because I'm not an engineer, but when you go through these variable renewable energy, you lose inertia on the system. These old steam units that move slowly, they're not very fast to respond, they're much better in terms of absorbing the rapid changes in frequency you get from a solar farm so they can absorb that. When you don't have that on the system, something else has to make up for the loss of inertia. So biofuel, biomass has a role and will continue to have a role in the system. It's dispatchable. It's quick. It's not necessarily quick, but it's just firm and steady. You can run it 24 hours a day, seven days a week. Just like fossil fuel? Just like a fossil fuel. But it's right now more expensive than a fossil fuel. And we've had failures. We've had biofuel projects that just never came to fruition. That's always going to happen. Not every project works, and that's a question of entrepreneurial feasibility and all this. That's true. And in part because liquid biofuels, the technology isn't quite there yet. We had Ina Colpono. They were proposing to use what was it called, a microwave depolymerization technology. At dinner, my wife and I speak of little else. A giant microwave oven taking Christmas berry trees and then from that cooking it down to the world. There were issues about that technology? It's never been done on a commercial scale. It's been done on a pilot basis. It does work, but can they take it from a pilot scale project to a commercial operation? Ina Colpono thought so, but I think their project is shut down. They submitted two applications to the PUC. Both of them were rejected. That was pricing, wasn't it? It was largely pricing. I can't say the price because the price was submitted on a confidential basis and that hasn't changed, but it was expensive. It had been submitted at a time when oil was about over $100 a barrel. It was still expensive when oil was $100 a barrel when you consider what it would be compared to now. So, regulatory, what was your question? My question back to is because if there's such a need and it's so important to our economy to have biofuels, why aren't we having more local production? So the question is, I know they have to go through the regulatory process in order to bring it in and in order to produce. So what is, if you can tell us what is the regulatory scheme for doing it and is that the hindrance or is there other reasons? If you look at the Green Energy Project, that whole thing started around 2006. They didn't get approval until 2012. They didn't reach commercial operations until 2015. So it took nine years from start to commercial operation. How can a company survive that long? You can't blame that all on the regulatory process. I really don't know what happened between 2006 and 2011 why that development process took so long. But some of these projects become very controversial. I mean, look at Hu Honua or even Aina Corpono, the idea of growing your own feedstock on either former sugarcane land or land that is now being taken over by invasive species, whether it's Christmas Berry or albizia trees, to take that land and use it for cultivating some kind of a plant material to either be converted to a biofuel or burned as biomass has become a real community issue. What was the community issue about it? What is the community concerned about such a thing? For example, the Aina Corpono project, the idea was they were going to develop it in the Ka'u area, south of the Big Island. There were a number of community people that didn't want the project. They felt that the land should be used for farming food crops. It was Brewer land. It was an original Brewer plantation land. That goes back before it was Edmund Olsen Trust land. Ed Olsen owns that land now. He was going to lease it to AKP, including the land in which the processing plant was going to be. The residents didn't like the processing plant. The idea of trucks taking the biofuel from... It's interesting because a lot of those guys were out of work because the plantation had closed. This would have offered them jobs. They were imposing their own jobs. There were a number of people who were in support. It wasn't complete opposition. But community outreach becomes an important part of developing these types of projects. You've got to get out early, and win over the community. Not only with energy, but with everything. Look at TMT and so many other projects. In terms of the feasibility of it, it seems to me... I'm going to throw an idea at you because you've been on all sides of this thing. Why don't we just leave feasibility up to the banks? In other words, if these guys are on a co-opponent or any other project, if they can get a bank loan to cover the capital investment required by the project, and the banker, he's going to look carefully to lose money. The banker says, yes, we'll loan you the money. Isn't that a sufficient statement of feasibility? That's a tough question, Jay. You're asking me, should the PUC be approving projects that have not reached commercial scale in other parts of the world? That's a tough question. When I was a consumer advocate, I thought the INA Co-Opono contract should have been approved. I submitted testimony to support both projects. I recommended that the commission approve, and the commission disagreed. It goes to Sharon's point, and I think we need to at least wrap a little on this in the next two minutes in our show, how can we make the gauntlet easier? I think we all have to understand that if the people out there in the community oppose it, that's going to be resistance that takes time to resolve if it's resolvable at all. That's not the only reason that the PUC or the regulators slow things down and take five years in that case. Sometimes more. It's not just energy, it's everything in a way. There's an article about Jean Park in the Washington Post a week ago. He talked about the problem with the false alarm and how Hawaii government can't seem to get anything done and why he's really special. This is in the Washington Post. This is not a good statement of how things go in Hawaii. Can we do something to make it faster? Can we have regulatory process that makes it easier, may I say, for a developer to develop? Sure. One of the problems we have is that developers spend millions of dollars in the development process. They get to the point where they even have a contract with Hawaiian Electric. And then they have to go... So you think, well, you've reached such a major hurdle. You finally have convinced the utility that your project is priced appropriately, that it's into their system, and then you've got to go through the regulatory approval in front of the PUC, and that can take a year. And then you can have your project rejected. It happened to a number of the solar projects. Hohohana was one. Nextera had proposed a solar project out in Hawaii. Apart from their acquisition of the... Exactly. That was rejected as well. And both developers had spent a lot of money on the dollars only to find out that the PUC was going to reject their project. So we need to get rid of some of that development risk, that regulatory risk, so that if we have an approved power supply improvement plan and, say, a biomass project is in the power supply improvement plan and it's been approved by the commission, and you price your project according to what the power supply improvement plan says, and you have a contract with HECO, it should be an easy process to be regulated. It should be a slam dunk at that point. It should be able to get easy regulatory approval. But it's not so. Not so. So what can you do? Is it like a major overhaul? Are there tweaks? Or is it, you know, shorten the time frame? Or what can you do? Or are we going to be kind of stymied to the future? Well, you know, the commission... No pressure on this. Well, yeah. And I've got to appear before the commission, so I have to be careful what I say. Carefully state what we should do. You know, the commission does a great job. So does the consumer advocate. You know, I'm not talking about when I was there. Dean Nishina is the consumer advocate. He does a wonderful job protecting the interests of consumers. But we need to have a power supply improvement plan that's not just accepted by the commission. We need to have one that's approved by the commission so that we have a certain amount of certainty that my project, my client's project, is in the power supply improvement plan, fits within the parameters of that plan. So I have a reasonable expectation that that project, if I can get a contract with the utility, is going to get approved. And there it is. Well, the banks will be easier, right? And the entrepreneurs will be more confident and it won't be completely a risk capital. It will be a manageable risk. So how do you make that change? Is that a statutory thing, Jeff? Is that something the PUC could decide tonight between cocktails? You know, how serious would it have, whatever would it take to make that change? I think it would take somewhat of a change of philosophy at the PUC. At some point we need to say, you know, the risk should fall on all of us on moving toward renewable energy. And, you know, we will have some projects that aren't going to come to fruition. We're going to have some projects that are going to fail. It's just the nature of development. And democracy. So if it is in the plan, once you get a PPA agreed upon by the utility and the developer or the vendor, then it has to come back to the PUC again, doesn't it? So is there any way to say within certain parameters or, you know, if you have this approved plan, you know, go forward. Do it, you know, instead of changing the plan. So it's one iteration instead of multiple iterations. And then you can go back every time you get a developer in. And the answer, Jeff? I agree with Sharon. I mean, to me, that's the way the process should work. Let's have a plan. Let's get everyone on board with it. Let's approve that plan. And then move forward. Just execute. So people can rely on that approval. Right. And now we have, now if there's, for example, you know, we're looking for so many gallons of biofuel. Okay, now we say we want one million gallons of biofuel per year on Oahu. Go ahead, developers. Here's the price. Come in. You guys all bid. Right. And that's the last thing they have to say. And it should be an easy approval. And likewise, this show is a done deal. Because we're out of time. Jeff, it's so nice. That was too much fun. Sharon, thank you so much. Happy Valentine's Day, you guys. Happy Valentine's Day. And we'll be back with Jeff on the 28th. More biofuel next week. Next week is Joelle and Carl speaking on aviation. Oh, aviation? Okay. They'll be taking over the show. Good night, Sharon. Good night, Jay.