 Hey, welcome to Stan the Energy Man. I'm Stan Osserman from the Hawaii Center for Advanced Transportation Technologies, part of the High Tech Development Corporation and Department of Business Economic Development and Tourism. Can't believe I got that all out in one breath. Anyway, thanks for being able to show today here at ThinkTech Hawaii. And yesterday we had another ThinkTech event, actually a ThinkTech slash Hawaii Energy Policy Forum event at the state legislature. And yes, January means it's time for the state legislature to kick off. And this one is being right after an election year, probably going to be a little slower than the ones where folks are sitting in place. But our topic this year, and Jay, if I don't want to go back and talk a little bit about what we did yesterday, was we had several of the specialists or subject matter experts for several of the bills that have turned into laws over the past decade or two and go back and revisit them and say whatever happened to was basically the lead in. Whatever happened to the bill that said this, how come we're, you know, where are we at on it? Where did it go? Are we still looking at it? Is it going away? Is it worth pursuing? And it was interesting. We only covered four or five bills. But the one that I was covering was, of course, one on hydrogen, which was, is my favorite, my specialty, my passion. And the bill, and I learned, I actually learned a lot studying up for this forum. But the bill was Hawaii Revised Statue 196-10, which actually came after or before the Hawaii Clean Energy Initiative. But they all came on board around the same time, 2006, 2007. And it had a companion bill which created a hydrogen fund. And to make a long story short, this 196-10 actually sets up the state headed on a trajectory towards a hydrogen economy. It gave the, it was, it's in law, it's in law as of 2006 and gave us direction as a state to move forward with hydrogen economy, focusing on the big island and using presumably geothermal power to make hydrogen, make hydrogen available for the other islands, and to start making available hydrogen for transportation sector, for grid stabilization, all the kinds of things that we talk about today that, of course, haven't been done yet. That was ten years ago. And so I was asked to comment on it, and I did. And quite frankly, it's a real uncomfortable discussion because hand in hand with that bill, which basically outlined the plan, was a bill that gave us ten million dollars to execute the plan. It was a separate piece of legislation, but it was put out there, ten million dollars was set aside to do hydrogen implementation and also set up some money for investors, to attract investors like matching funds for venture capitalist type folks. But that money was under a lot of controversy, right from the beginning. And the controversy got so ugly, I'm not going to go into the details, but we had state senate investigations, we had really nasty accusations, we had a lot of hard feelings. And unfortunately, because the funding part of the bill was so nasty, the rest of the bill was pretty much just tabled and never went anywhere. So since 2009, there has been zero money added to this hydrogen fund to do any of the stuff that's already in law to move Hawaii towards a hydrogen economy. Which is sad, because we have everybody wringing their hands right now with Donald Trump being elected and how all of our initiatives for clean energy are going to fall by the wayside because he's poo pooed, climate change. And yet we've had ten years to get a head start on all the stuff that we should have done in the state. And we have it. And that's really sad. It's a sad statement on the political will of our legislator and our legislature and our governor. It's a really poor statement about what the rest of us have come to expect and will put up with. The good news is that in the private sector, the not-for-profit sector, the University of Hawaii and HNEI and also my organization HCAT, we have all collectively done a whole lot towards fulfilling that bill, but we still have done it without any kind of help from the state legislature in terms of funding. Now recently, last session, we did get a bond floated for $1.2 million to design a station for the Department of Transportation, a hydrogen station, and we hoped to have that RFP on the road and at least get design work done and started. But it's a bond, whereas the $10 million was actually straight revenue money that we could put out there and actually just spend it, the bond we have to pay back. So whatever our plan is to use that $1.25 million, it has to be paid back to the state. So a recap from my side, yesterday was kind of an emotional traumatic day for me because I had to bring up a pretty sore subject and be the bad guy. But we should have addressed a lot of this 10, 12 years ago and over the last 10, 12 years come up with some great solutions that unfortunately our legislature is at square zero or maybe square one and we have a long ways to go and we wasted 10 years of Hawaii's time moving ahead in a clean technology and a renewable energy resource that we really had the wisdom 10 years ago to implement. So that's my recap from yesterday. Other than that, it was a quick and dirty session, great speaker from the mainland who played a little bit more sunshine into the equation which I can summarize by saying the actual financials of using renewables is getting better and better as far as competition against fossil fuel and as long as a business case gets better and better, the chances are we're going to see more work in the renewable energy side because it makes a good business case and as long as it makes a good business case, private investors will get there. So regardless of whether the government supports it, makes good policies for it, the private sector will have more and more opportunity to get into that vision and move it forward. So no gloom and doom just because we have the Trumpmeister coming in as president, we should be okay. So with that behind us, today we have a great guest coming to us from the great state of Montana. I was going to try and Skype him in a couple of weeks ago but he's here in person because we just did a 65% design review for our microgrid at Hickam and he's here to talk to us today about a subject that's really important to me and that's how we vet the technology that we put in these microgrids because as I try and set the example for the Air Force and hopefully for our own Hawaiian Electric Company, picking the right technology to go on our microgrid and making it successful is critical. I can't make any mistakes, I have to pick the best technology I can and there's a lot of moving parts to that decision. So today we have with us Chris Hergut from Mill Tech out of the great state of Montana, Montana State University if I'm not mistaken and Chris, welcome to the show. It is a pleasure. Thanks for being here today and this is not your first trip here. No. You're very familiar with what we're doing. Yeah. Don't get lost empathy from the coworkers after they keep coming out to Hawaii. Yeah, I know. Yeah, it's tough, especially in January and February. So what's the temperature in Montana right now? It's just about 12 degrees I think, last time I checked. And a windchill of? Probably closer to below zero. So, okay, you guys, looking in on YouTube later on, don't give Chris too much heat. He did work hard over here. So Chris, what got you into Mill Tech and the kind of work that you're doing? What kind of led you down this path towards where you're at? Well, I got my education in industrial engineering. It was kind of my preferred engineering because there's a lot more people focused whereas electrical engineer focuses on electrical components and the science behind electricity. A lot of industrial engineering is processes and one of the major part of processes is people. I think that's a lot more fun to interact with than some of the other options and it's just a little more fulfilling in my opinion. And so that kind of led me out into the manufacturing extension partnership in Montana which is all about helping small manufacturers across the state. And so I had to travel all over Montana providing engineering support and all sorts of forms and concepts for the small businesses. And that kind of led me to practice a lot of my engineering principles especially in manufacturing and industry. And then I crossed paths with Mill Tech because it turns out there are some organizations in Montana that do support the military. And I guess I rubbed them the right way because they decided to bring me on board and I got to come out to visit you guys in Hawaii as a result. And so I think that's a good success story on my end. Well, we're glad you're out here. And it's true that as we look at the process of selecting these companies they're not just the technical piece. We're not just looking at the piece of equipment we want to put on our grid. We're looking at how ready for manufacturing is that. When we put in our purchase order to request that material or that equipment can they fulfill the contract? Because we're doing some pretty unique stuff out here and the company has to be able to deliver. At the same time we want the cutting edge stuff and some stuff we're willing to take some risk and some stuff we really want conservative, solid, not too much risk. So we have those components. Then we have the financial component of the company itself. Is it financially solvent? Does it have a cash flow issue? Is it a publicly traded company or a privately held company? And are they stable? If we start putting money in there and giving them money and then they go bankrupt it does us no good. We lose the money. We don't get our equipment. So it's the technology. It's the capability to physically... Do they have a plant to produce at the volume and scale that we need? Do they have the financial stability and the long haul? Can they last through our project and give us what we need? Those kind of components come in there and so that's what we ask you to look for. And to truth be told, Miltec actually has two touch points in Hawaii both in D-bed and one of them is with us doing what you do but we also have Miltec folks that work with our high tech development corporation in their industrial and manufacturing branch as well. So some of your compadres do get to come out here. They can't be totally ragged on you. They do get to travel out here as well to work with HTVC and MIC up in Manoa. But could you tell us, maybe pick some of the things that you've been working on. Maybe one of the things you've been working on is for me the batteries and kind of walk us through your selection process and what Miltec does to look and screen through the multitude of companies that we have to fill that requirement. Absolutely. My first obstacle is finding the vendors and manufacturers and companies in the first place and even though I do have an education engineering I don't have the expertise that a lot of people have in renewable energies or batteries or any other kind of technology. There's people who have been doing this their whole lives longer than I've been alive and they have a lot more passion for the subject matter than I can and so the first step is trying to find that expertise. I'm lucky that with Miltec being part of the chain of command I've got access to laboratories and so there's a lot of very passionate people who have say been focusing their whole lives on batteries and so once I can find these people they're the ones who let me know what questions I should be asking what organizations I need to be seeking out and just as importantly what organizations I need to be avoiding because a lot of it is marketing as opposed to the ability to provide and so I'd say once you get the first piece of the experts that's when you can actually begin searching for the technologies and a lot of it is getting on the phone and trying to get names and phone numbers of people who can answer your questions and point you in the right direction and so once you make that connection then they have to be willing to open up their business to you just like you mentioned we need to be able to determine their financial capabilities make sure they're gonna be around some of the businesses that I talked to six months ago trying to find a battery they went out of business between then and now and so a lot of that comes to when you're a new interesting and novel technology you're probably a start-up organization and you know the same problems every start-up has once the cash flow stops so does your technology and so one of our major steps is to try to find out some of your basic financials like debt to asset ratios if you're making revenue and profits and those kind of topics so you do like it done in Bradstreet kind of review of their financials yes that's actually one of the things we ask if they have their Bradstreet numbers and identification okay I tell you I know there's a lot more to go we're gonna take a quick break here and come back in 60 seconds and we'll get into the rest of the details on your search through the company absolutely you're watching Think Tech Hawaii which streams live on thinktechawaii.com uploads to youtube.com and broadcasts on cable OC 16 and O'Lellow 54 great content for Hawaii from Think Tech Aloha and Happy New Year it's 2017 please keep up with me on Power Up Hawaii where Hawaii comes together to talk about a clean and just energy future please join me on Tuesdays at one o'clock Mahalo good afternoon Howard Wig codegreenthinktechhawaii.com I appear on Mondays at 3 o'clock and my gig is energy efficiency doing more with less the most cost effective way that we in Hawaii are going to achieve 100% clean energy by the year 2045 I look forward to being with you Aloha hey welcome back to my lunch hour Stan the energy man here with Chris Hergut from Milltec in the great state of Montana big sky country in case you were wondering what was their state flower the I was going to remember that I always do my homework for this stuff and I totally trashed at this time Chris but anyway we were talking about companies we talked a little bit about the technical side you go to the labs you get a good sort of which companies maybe should focus on and then you look at their financials and then what's the rest of the process well once we find organizations that we have confidence that they're going to be around and actually be able to provide for the micro grid we have to kind of I guess down select we can't just try to get 100 companies trying to send us a battery so that's when a lot of what defines engineering is placing constraints and finding those exact metrics in which we'll best fill the scope of work and so a lot of that's working with the design team in this case Hcat and Burns McDonald and so a lot of our decision criteria comes from what do these people need to fulfill the requirements to make a micro grid and so we get constraints we want a very stable well-developed technology for this first portion you might want to stick to something like lithium ion which is nothing new and mind-blowing but it's something that there's a lot of research behind they've been used in a lot of micro grids beforehand so right away that cuts out a lot of the manufacturers we identify in the first place and then on top of that there is the wattage requirements bringing in the megawatts all of a sudden a lot of these other businesses they can't produce a battery to that level and so that slowly narrows down until you get a handful maybe if you're lucky if you get a dozen but typically around like this last time around it was about three vendors that we thought might be able to provide something that's been developed that they can produce quick enough to make it into the micro grid and still perform to what the expectations are. A lot of your work is military related whether it's in a lot of it I guess is with the Marine Corps and the Army as well in the overall company scheme of things not so much for our grid but then you have the buy America issues and usually try and look for American companies first do you ever have to look at foreign companies or is that also in your repertoire? Yeah well a lot of good renewable energies products come from Australia or in Europe there's a lot of focus too and so with buy American it's really tough to find people that can actually meet those requirements and even worse yet is even if they are American companies especially if they're new companies their manufacturing isn't done in the United States law of it's like coming out of Singapore or China or South America and so not only does that make it harder to procure but it also kind of violates some of our criteria of we want American produced equipment. So in our microgrid we've kind of divided the requirements of the kinds of equipment we want into three major categories energy storage which is where the batteries roll in power production so maybe even fuel cells and waste energy plant maybe something like a diesel gen set or some generator that runs off some synthetic fuel or something so those are our three big categories and on the energy storage side we have batteries and of course I'm going to tell you you've got to use hydrogen anyway so has Miltech done a lot of work in the hydrogen area and what some of the research that you've done so far on the hydrogen energy storage side or the power production side with fuel cells do you guys feel comfortable looking at that stuff? Absolutely and again it comes down to we surround ourselves with a lot of experts in the subject matter there's a lot of things I personally wouldn't have considered especially when it comes to where do you store hydrogen you just can't put it into any hydrogen into any tank like you would store air or propane hydrogen is one of the smallest molecules or atoms and so you need welds to hold hydrogen so you just can't get any sort of structure to hold this stuff and so luckily I had the experts that told me no you're looking in the wrong place then there's a lot of ways to produce hydrogen whether it be through electrolyzers or hydrolyzers then of course there's different ways to turn hydrogen into energy like you mentioned fuel cells and then there's a lot of cutting edge technologies people who are trying to make internal combustion engines that run on hydrogen as opposed to petrol Okay so the energy storage we've got covered power production is pretty straightforward actually for the most part the energy controls have we actually pressed you guys in to look at for energy controls or Burns McDonald's still kind of working through a lot of those details right? Yes with energy controls a lot of it might be determined by the proprietary that Burns McDonald's comfortable with because they've been making microgrids for a really long time and they've got a really good handle on what they like in controllers a lot of it's also dictated by the energy storage if it's energies being stored in a battery a lot of times that battery might influence what the controller will be and then we are prepared to we have an inkling that controllers we're going to be on the next in queue for us to be searching for smaller microgrids. Yes and so we do have that in queue and ready to begin the search and we've been working with our again with our experts to make sure we're searching for the right questions to answer one of the things that and I've talked to several people that do a lot of technology work in Hawaii of course as part of the show and one of the things that I sometimes like to talk about is how culturally sensitive our society here in Hawaii is with where the only state that came from a monarchy we have a fairly local local Hawaiian cultural constituency and rightfully so I mean this is their native land and this is where their ancestors practice their ancient traditions and things like that and so we expect that we should be culturally sensitive to the kinds of technology and what we bring into the state like I don't think you'll ever see nuclear power in Hawaii as a power production thing just because culturally it would just not go over well at all in our whole I just can't even imagine it happening it's so foreign although a good portion of the electricity generation in the mainland 20-30% is nuclear power but Montana is actually a lot like Hawaii other than you don't have many beaches and colder and you got big mountains but so do we we got some pretty big mountains in the state with snow on top by the way yes I did see that I actually saw some last weekend but you also have a large Native American population and about the same size overall population is the state of Hawaii in Montana does Montana have the same kind of cultural sensitivities that we face here in Hawaii how do you guys address those things when you're trying to do these kind of projects in Montana yes well there's a lot that goes into the cultural sensitivities well for one you know the first societies in Montana were you know the indigenous people and there's a lot of politics that go into it in the nature of reservations and everything along that line there's the preservation of culture which I don't think we're necessarily doing a very good job of and then there's you know I think there are still prejudices as well that I don't quite see perhaps it's out here in Hawaii but it seems a lot more accepting of the mixture of cultures and assimilation where that's very segregated it feels like in Montana and so as far as like how energy applies to that there's not a lot of need for like cheaper or more prevalent energy sources but there is a lot of concern for its impact on nature because most of Montana is the fourth largest state with only a million people spread across it so a lot of it's all trying to protect the beauty of the state that's one of the main drivers and so like Glacier National Park which used to have hundreds of glaciers is now down to just a dozen and that's not going to last for more than a couple decades and that's also in the center of some of the largest Native American populations and so our careless use of energy has almost completely removed there what was what you would think as a historic native scenery I don't know if this is a total surprise to you because I haven't prepped you for it but how is Montana doing in terms of renewable energy I mean do you guys have hydroelectric that you're able to capitalize off of as a renewable energy or what are some of the energy sources that your electric utilities do? Well there is hydroelectric because we do have access to reservoirs and large lakes and so a lot of that does power Montana but unfortunately I'd say the majority of our power comes from coal still it's one of the major industries it's one of the major employers and a lot of people fear that by replacing coal with another energy source is the same as kicking aside hardworking families and stopping them from being able to provide and so there's a lot of I guess fear that keeps attached to our coal factories and our coal plants and it's probably pretty universal I mean Hawaii's fear of not having fossil fuel around doesn't help us either we have a lot of people that work at refineries and gas stations and things like that they probably have the same fear they don't do coal mining in Montana but all the coal power plants and things like that and we do have wind turbines but not near enough to provide energy to the larger communities in Montana and you have enough space for them yes we definitely do but unfortunately weather makes it a lot more difficult for photovoltaics and solar for wind it's very inconsistent pretty far north well does Montana have any special plans to move away from coal and have more renewable resources on board or they like to it's kind of a pipe green right now there's a hostile political climate on that there's a lot of people who want to the immediate security of coal and there's a lot of people who know that the way that history is kind of the trend is showing us with politics that we're going to slowly move away from coal and restrictions making it more expensive and it's going to really force Montana's hand into being reliant on different energy sources well it's good for us too as part of this show to see what other states are facing in terms of challenges with renewable energy and you know we're in Hawaii it's pretty straightforward we import all our energy and yet at the same time we're sitting really close to the equator compared to every other state so we should get plenty of sunshine all year round we don't have long winter nights like you guys do in Montana and we should be able to use a lot more renewable we pay a huge price for the fossil fuels we import because we don't have coal we don't have natural gas we don't have oil we don't we have to bring all that stuff in to generate our electricity so we're in a whole different ballgame compared to a lot of the states on the mainland and I'd say probably that would roll over even into your transportation sector right because there's not a whole lot of impetus for you guys to switch off of gasoline either no well it's hard to justify an electric vehicle especially with the distances you have to travel in Montana when you when we don't measure in miles we measure in hours how you get from that's a big state that is a big state and that's it we have the same problem on the big island by the way electric vehicles on the big island you can easily drive an hour hour and a half between major locations and a lot of those little vehicles that doesn't help your electric vehicle much at all well anyway Chris thanks for being here today we've actually come up against our half hour already so I'd like to thank you for coming out away from Montana and talking to us a little bit about industrial engineers and what they do how they help us make good choices on our grid and sharing a little bit about Montana and the energy situation of Montana with us we thank you absolutely it was an honor thank you it's great to have you here and we'll catch you next time you come back for sure and tell all those people to give you a bunch of grief to chill out literally yeah alright everyone thanks for being with us on my lunch hour today and next week Friday noon times every Friday at noon I'll be here trust me if I have to be here in a stretcher I'll be here but thanks for being with us here at Think Tech Hawaii in Santa Ana and we'll see you next week hello