 Think Tech Hawaii. Civil engagement lives here. Aloha. I am not Mina and I am not Jay. And I'm not Marco. Mina and Jay are somewhere in the great wide world doing things they needed to do. But I have the pleasure as Ted Peck, which I have been for my whole life, to be here with Marco who he has been for his whole life, to share a little time with you and talk about renewable energy and stuff that's happening. Marco? Well I gotta say, Ted, that you look marvelous. You look marvelous. I love your shirt. You're well-quaffed and to be on the show with my twin brother of a different mother to talk about energy. It's Ted and me in energy. So it's so appreciated that and I'm grateful that you were able to be our host today. So thank you so much for coming into the studio and having fun with me today. It's always fun to chat with you. And now that's a literation, not unamonipia, right? It's a literation. That was good. That was a really good, what did you say? It was Ted and me and energy. Ted and me and energy, yes. Not Ted and me, but Ted and me and energy. Yes, very cool. Well let's let's take the dive in this precious time that we have together. So you come with quite the pedigree. You're a naval midshipman from Annapolis. You spent some time deep under the water in some of America's submarines. You are now working, have been working in Hawaii in renewable energy for a number of years, and you were Linda Langell's energy chief if I'm not mistaken under administration for a time in Tibet. So how did you come to see the good side of the force in terms of renewable energy? I'd be really curious to hear your path, how you came to Hawaii and how you ended up doing what you're doing now. Well first of all, saying I have a good pedigree sounds like I'm a purebred dog, which I feel honored that you would call me a purebred because nobody's ever called me a purebred because I'm a mutt, right? But how I came into renewable energy, when I was working for Booz Allen, I was with Booz Allen here in town for 12 years. We started exploring what was happening in renewable energy, and renewable energy just has a lot of upside. From an environmental perspective, from a financial perspective, from an energy independence perspective, there's just a lot of reasons. So when I had the opportunity to go work at the state, I know a lot of folks associate with Linda Langell and I don't have a problem with that, but I do remind people that I was a civil servant, came into the civil servant force via the normal civil servant process, and I left the state not because the Langell administration came to an end, but because I had something that I had to go do. So yeah, so that's kind of how I got into renewable energy. And yeah, I was part of state government for the first three years of the Y Clean Energy Initiative, and it was an exciting and heady time. Well, we're some of you, and before I forget, and I apologize for not not introducing you with your current title, which is that you are CEO of Holu Energy, and how about sharing with me and with us what Holu does and what Holu has been doing in terms of accomplishments over the past year or two? Yeah, so Holu Energy has been around for about two and a half years. We mostly do microgrid development for commercial and industrial clients, helping people figure out what is their best net present value of savings for commercial facilities. That's the approach that we take. We help businesses look at their energy situation and figure out how to stabilize and reduce their costs while at value. And that value often comes from energy storage, doing some things for them that just a pure PV couldn't do or what grid electricity is limited in being able to do. So that's our focus. We're involved in an offshore wind farm development. I've been involved with progression wind since 2012. That's an ongoing process, but most of our focus is on microgrid development in the commercial space. How would you describe where the market is at right now in terms of what Holu is offering? Are we just kind of in the infancy of what we hope to be a growing trend and a growing market? Or do you feel things are well underway? Where do you see the evolution of where we're at? That's a great question. At one point I just saw a Dunkirk in the darkest hour and I've always, the speeches that Churchill gave were really powerful in that time. And one of the things he said, I think it was after the Africa campaign, he said, we're not at the end. We're not at the beginning of the end. We're more like at the end of the beginning. And I think when I think about the area of the build out of a set of distributed energy systems in a particular grid, you kind of look at what the capacity is and capacity is a measure of basically rooftops, the amount of rooftops or the amount of land that you could fill. Also limited by the amount of load that you have. We had an era that has come to an end where that second measure is really by how many kilowatt hours over a 24 hour, actually over an annual cycle, are available to build generation to fill up. That was when the net energy metering process ended, when the NEM process ended in October of 2015. That was really the beginning of the end of that session because that was when they stopped taking applications. But now most of those applications have been built out most, not almost all, not all of them. And so now we're in either a restricted export where like a customer grid supply where you receive some compensation, either customer grid supply or which is CGS or CGS Plus, which is just starting, you know, CGS with some amount of compensation. CGS Plus has a lower amount of compensation. So we're really moving into the era, the kind of the second wave, which is a non-exporting era when rather than treating the grid like a battery that is perfect, you don't have to pay for it. Now you have to pay for it. CGS is analogous to you paying for the grid to store your energy, CGS and CGS Plus. Now you can actually store your energy. And as, you know, that is still kind of coming in this beginning of this era of people self-supplying their power, where they generate the power and any power that they can't consume at that time, they store it and then use it at another time. So it's kind of like the beginning of everybody having a refrigerator for their energy rather than having to go buy food every day. So I think we're kind of at the beginning of that phase, maybe a little bit past, you know, maybe the end of the beginning. That's my Churchill quote. I like that, Twist. I appreciate you quoting Winston. He's quite a towering figure for so many years. He's very pissy, you know. Very pissy. I think you mentioned the Hawaii Clean Energy Initiative early on. I thought when I was taking, we're going on about 10 years now, since that was announced. How would you judge the progress that the state has made towards the goals stated and agreed to in terms of the kind of poll star, which various stakeholders agreed to try to aspire to reaching? What kind of progress or how would you judge the progress that the state has made over the past 10 years? Well, we're on track to hit our targets, right? The next target is in 2020, where 30% of the amount of energy sold by the utility 30% of that comes from renewable energy. And that's even kind of a misnomer of the way I say it, that 30% of that number is the amount of energy that has to be on the grid. Right now, from the RPS report for the HECL companies, they're at just short of 27%, which is about 17% that they're buying from independent power producers and selling to their customers. And about 10% of that is people in the community self-generating. If you look at the graphic that shows the trends over the last 10, 11 years, it's kind of breathtaking how rooftop solar has really moved to be won away the largest single source of energy of all these different renewable resources. I think to be pointed about your question, there's some interesting data. Wind actually has kind of moved up, but here in the last year, it came down a little bit. There were less kilowatt-hour generated in 2017 from wind than there were in 2016. I'm not certain if that's what that's due to. It may be due to curtailment, where there just isn't load on the grid, and so that wind gets kind of curbed back. Or if it just wasn't as windy, I mean, that's very much a possibility. So I don't have an answer. We added a boiler for H-Power, and yet the amount of energy we're getting out of H-Power has not gone up significantly. That's a little perplexing. I think just as biodiesel, the Pacific biodiesel has done leadership, yeoman work, in taking ready feedstocks, waste oil, and refining that into biodiesel. But that's a limited feedstock too. We only have so much trash. We only have so much waste oil. So we really haven't made significant progress in actually growing crops that we're converting into energy. Pacific biodiesel, Robert and Kelly King, they're definitely leaders in that. They're growing sunflowers on Maui and looking to see if that's going to be a crop that pencils. One of the things that came out of not just the Hawaii Clean Energy Initiative, the Hawaii Clean Energy Initiative was started in 2008. 2008 is when we had the big economic collapse that led to the stimulus bill that led to millions, hundreds of millions of dollars, actually billions of dollars that went into new development of energy. And one of the areas that was very promising at the time was algae to energy. Taking algae and being able to process it cost effectively and make oil, and actually not just oil, but oil-based products that are what they term drop in fuels. Basically being able to make gasoline and diesel from algae products that you can put into any kind of transportation vehicle that would need to be adjusted on the hardware side. They were able to do that, but they weren't able to do that cost effectively. And then when the price of oil dropped, that kind of killed those initiatives. So a lot of the folks in the algae world have gone into food and into pharmaceuticals. That technology is there, but it's not yet cost effective. And that was a disappointment. We're about to go into a break, Marco. So why don't we come back and I could finish answering that question after the break and we can further explore where HCI is today. Great. Thank you. Okay. Great. We'll be right back. Hey, Aloha. Stanley Energyman here on Think Tech Hawaii where community matters. This is the place to come to think about all things energy. We talk about energy for the grid, energy for vehicles, energy and transportation, energy and maritime energy and aviation. We have all kinds of things on our show, but we always focus on hydrogen here in Hawaii. Because it's my favorite thing. That's what I like to do. But we talk about things that make a difference here in Hawaii, things that should be a big changer for Hawaii. And we hope that you'll join us every Friday at noon on Stanley Energyman and take a look with us at new technologies and new thoughts on how we can get clean and green in Hawaii. Aloha. Aloha and Richard Concepcion, the host of Hispanic Hawaii. You can watch my show every other Tuesday at 2 p.m. We will bring you entertainment, educational and also we'll tell you what is happening right here within our community. Think Tech Hawaii. Aloha. Okay, we're back. Deep breath. We're back and we're live and it's Ted and me and energy. And again, I'm so pleased to have Ted. I sometimes call him Theodore because it reminds me of Theodore Cleaver and leave it to Beaver. And that was that was a staple back when I was a kid. So once again, great to have you here. Ted, you mentioned earlier on the the word microgrid. I wonder if you could explain to us what what does a microgrid mean and why why should we care? Yes, it's interesting question because people throw around microgrid without really defining it much as Henry Curse would say we talk about renewable without really defining it. The way that I've seen microgrid, I've seen some pretty heavy duty definition of microgrid, but I think it's actually much simpler than people make it. A microgrid is simply co located load and generation with the ability to dispatch, meaning the ability for that generation to meet the load as the load varies a generation can go and meet that load. Now, microgrid is not necessarily islanded islanded meaning disconnected from a broader regional geographic grid. But it can, you can have a microgrid that can islands or you can have a microgrid that doesn't island and where the grid, it works in conjunction with the larger grid to meet load. But but the core idea of a microgrid is co located generation and load with the ability to dispatch and that ability to dispatch means effectively storage energy storage. You could store energy and deliver it as load requires it. I gotta say, Ted, you hit that one out of the park. If somebody had asked me that question, I would be fumbling a heck of a lot more than you did. So now you don't have to mark up. Very simple. If I have questions, I know who I can always fall back to Ted to to provide clarity into the darkness, dark recesses of my limited information. So great answer. So why should we care? What differences are going to make to to ratepayers writ large and to our utility companies in terms of I'm assuming that you hope to and want to see a growing proliferation of microgrids across across our islands. Would that be a fair statement? I think that's a fair statement. I think now I love history as you could probably gather. You know, over 100 years ago, really now about 120 years ago, 125, almost every actually we'll go back to maybe 130 years ago, the world started electricity started as a microgrid phenomenon. If you had a building, you had a generator in that building, and that generator powered your lights, and whatever machinery you had. And what happened over that first 30 years of the age of electricity is that industry found that it was more cost effective to have a larger central station generator that would feed power to multiple buildings and be able to cross level load. And because you had a bigger generator, you could drive down your cost of generation. And so all of all, you could drive down the cost of energy and then in the beginning of the century, it was industry that went and said, Hey, I think that it's going to be best for everybody. If we are regulated by the states, because that does two things. Primarily, it drives down their cost of money, because delivering electricity is a very capital intensive business. So it requires debt. And so we could drive down our cost of money, we could both drive down the cost of delivered energy, and we could drive up our profit margin as well and be more survivable. You know, profit margin, unlike some, I think I don't think as a bad word, I think profit margin is just, Hey, we did good, and we're getting returned for being good. And what we get for being good means that if we go through a bad turn, we're not going to die because we've got some resources to go. So we're certainly not seeing micro grids just in the state of Hawaii. I mean, it's on the US mainland as well. See, Marco, he's getting ahead of me here. Let me finish. And then we'll come back to that. The bottom line, though, is that central station in a fossil based grid is typically was at the beginning the most cost effective, but renewable, especially solar is by nature, a distributed resource. The sun falls on everybody's property. And so taking that energy from the sun by necessity takes distributed generation and to have distributed generation that is stable, because we're still going to have a grid, you need micro grid where you have the ability to store. And so, you know, rather than, you know, for the first era, the NEM era, PV was a net negative on grid stability. Micro grids turn PV into a net positive because the battery that's associated with that acts as a buffer or a sponge. A grid becomes more spongy, rather than once an electron goes on the grid, it's got to be consumed immediately. With storage, you have a way station that energy can go into either from the grid or from renewable generation, distributed generation, it can go into a battery and then it can be made available when the load needs it. And so it makes the grid more resilient, more spongy. In fact, holu, holu is the word that comes from what the tarot leaf does in the wind and the rain, how it bounces and is resilient. So holu in Hawaiian really means resilient and replies resiliency. I'm very, very appreciative that you explained that because I did not know that was the meaning of the Hawaiian word holu. So appreciate that. So you're making a case for micro grids being in the best interest of pretty much all concerned ratepayers, grid operators, utility companies, what's in your experience here in Hawaii so far in terms of the degree to which you perceive the Hawaiian electric companies being supportive and, and desirous of wanting to see micro grid proliferate? Well, I, I, I do not even deign to speak for the eco companies. I will say that there is a recognition and a value proposition that the commission is seen for distributed services, you know, grid services being made available on the grid so that the grid operator has the ability to reach out to other resources that are likely going to be more cost effective than the central station resources that just bring some of that frequency management, that voltage management, especially on a circuit level. So again, you know, a micro grid, you know, which is storage. And well, storage, whether it's in a micro grid or just standalone storage delivers value to the grid, both on a system wide basis, and on a circuit basis. In fact, there's a Kevala analytics is doing a project where they're looking at what really is the value for on a circuit level for distributed assets. Not just, you know, HECO is taking a good step forward, but their approach to date is really on a system level. And I think that that's probably for the utility, the right answer at this point. But once they have kind of done a test drive on a system level, I think the next step would be to look at how do we provide circuit level grid services and value those on a circuit level. What's happening is that the grid is becoming a very complex animal. How how the grid operates with not just central station generation, kind of in a in a spider pattern, all just going out to all the ends of those circuits, but central station combined with distributed generation with storage and grid services coming from not just central station, but from all over the grid. So we are, we are really in a very formative, exciting time, but also very unnerving time for people who, you know, don't like change, you know, that's hard. You know, when I was at the state, we would say, change hurts. Transformation hurts all over. So we are, we're kind of used to it to a degree. But we still have some some stormy weather head and making those changes happen. In the little bit of time we have left, let me ask you kind of a cut to the chase question about storage. So right now, there is a Senate bill 2100 that is going to be heard on Wednesday and the Senate Ways and Means Committee also known as the Money Committee. Do you support the state of Hawaii coming up with a separate tax credit for energy storage similar to, to what would be the ITC would allow for as long as the storage is, let's say, 75 or more percent charged by renewable energy stores? Do you believe that it's a reasonable expenditure of, of, of general fund dollars for the state to be involved in supporting essentially the retrofit of both more commercial sized storage to existing PV and then what I do, which is residential storage to existing rooftop solar. What's your position on the state getting involved in terms of a state, separate state tax credit for storage? So that's a real inside baseball question. So with a minute that we have remaining, let me see if I can avoid answering it well. You stinker. I think that, first of all, the IRS, the federal government, and the state have said that the existing credits that are in place allow for storage as part of renewable energy system. Okay, I'm not going to go into detail because of limited time, but the federal government has provided some, some granularity about what that looks like. The state has basically said it's part of the system and the states protected from over spending money to date because of the credit is capped on a per system basis. The credit is capped. So the real question, 2100 does two things in its current instantiation. One is it starts a decrease of the credit, which is already been happening because the cost per PV per watt has been going down. So that decrease has been happening. The standalone storage has a value proposition. If the state wants to incent it, that makes sense to me. It has a policy strength that at a policy objective that standalone storage is meeting. And so I think it does make sense for the state to incent it by doing a credit for standalone storage. I do question though, you know, a ramp down, you know, we're really less than a third of the way towards our 100% goal. So finishing, so for kind of closing out incentives, which really are there to help us meet our objective, that doesn't make a lot of sense to me. I don't know if I didn't answer that question adequately or not, but there you go, Marco. You did. You did. That's great. And we'll know more in the weeks to come. And I think it's going to come down to a conference committee in early May to see whether something like this gets to the governor's desk. So more, more interesting news to come. It's always fun to get nerdy with you, Marco. I always enjoy that. Twin sons of different mothers. Thank you so much, Ted. It's been great to have you. Hope we could go on for hours and hours, but our time is limited, though, till the next time, I assume. And we'll see Mina and Jay here with you next time, I assume. And I'll see you at a cold pancake next time you're on island. Yes, fresh coconut sauce and a little bit of maple on the side, please. There you go. Okay. Well, thank you viewers. I hope you enjoyed e-dropping on our chat. And you have a great week. Thanks again. You're rocked, Ted. Thank you so much for coming in. Bye-bye, Marco. Bye.