 Hawaii, the state of clean energy, it must be Wednesday. All right, Mitch, tell us exactly what we're doing here now and who is making the show possible. Well, first of all, the Hawaii Energy Policy Forum is making it possible through funding supplied by the Hawaii Natural Energy Institute of which I'm a part of. All right, okay. What we're doing here right now is we're learning about the latest and greatest project from Hawaiian Electric. And we've got Jack Shriver, who is responsible for putting all of this together and you'll be totally fascinated when you see what Jack built. You will. Yeah, that's awesome. So Jack, welcome to the show, Jack. Nice to have you here. Thank you. So can you tell us, you know, this is a moment in time. It's an award. It's an important project. It's the confirmation of certain principles and arrangements. We're excited already. Excited us more. Okay. All right. Well, thank you very much. Yeah, it's great to be on here and I appreciate your time and attention to this. So, yes, the moment in time is that Hawaiian Electric Company was just recently awarded an association of Edison Illuminating Companies, which is a utility consortium, an award for the Schofield Generating Station project, which is a new power plant that we've built. It went into service about just over a year ago in June of 2018, and so the company's been recognized for the unique nature and the unique contribution of that power plant to the way utilities do business. So what exactly is unique about it? Well, the thing that's most unique about it is the business arrangement that brought this plant into fruition, the way the project was developed. And it is a public-private partnership between the Department of the Army and specifically the U.S. Army Garrison, Hawaii, and the Hawaiian Electric Company. And the real, at the core of that arrangement is that the Army provided Hawaiian Electric Company land, just over eight acres of land, on a 35-year lease, and in return, we have provided an energy security guarantee to U.S. Army Garrison, Hawaii, in that we can provide them power within two hours of them saying that they are ready to receive that power in the form of a microgrid under certain circumstances, certain emergency circumstances. Well, that begs to be unpacked. There's a lot to unpack. Okay. Unpack it. We should switch you in. Unpack. Yeah. Okay. So first of all, how big is the plant? I mean, in terms of the power output? Well, it's a 50-megawatt power plant. So it consists of six reciprocating engines, big reciprocating engines, which I'll show you some pictures of later. So they're like diesels. Does it run on water? They are. It does not run on water. No. Why don't we take the water off the table, because it doesn't bear any relevance to the discussion. All right. Thank you. I run on water, so. But yeah, it's a 50-megawatt power plant, which is powered by six big diesel engines. Well, when I say diesel, I mean, they run on the diesel cycle, right, because this is... You've got pistons and everything. They're not like a turbine. Think tech, right? So we can talk turbo. No, it's not a turbine. It's a reciprocating engine. But as I like to tell people, you know, these are not the diesel engines of yester year, where, you know, you would get in behind like a diesel car, and when they stomp on the gas, you'd get this giant cloud of smoke out the back. We don't do that anymore. Yeah. Well, no, these are really... And they're quick-starting. They are quick-starting, and that's, you know, we're trying to transition over time our generating fleet from a more base-loaded kind of older-style power plants to more flexible generation. We call it flexible generation. And a big part of that is to be able to start up quickly. These particular engines, we can go from cold iron to full power at 50 megawatts in less than six minutes. That's a power plant. Well, it's pretty fast. And just as importantly, we can stop the engines in the same kind of timeframe. And that's important because for our other power plants, you know, if we don't need them, because there's a lot of solar or a lot of wind, and we can ramp down those power plants. They take a long time to shut down, and then they have to be shut down for a period of time. And then they take a long time to start up. But with that whole time of shut down and start up, you're burning fuel. And you know, not delivering that energy to the grid, you're using it to start up the plant. With these engines, you can... You don't need them, you just turn them off, just like your car. This reminds me of the peaking plant at Kapolei, huh? The peaking plant also runs on biofuel. It's also quick-starting, quick-stopping. It's also highly efficient. You know, it's technologically advanced. And you only use it when you want it. It's the same kind of approach. I'm sure the technology here at Schofield is better. But the peaking plant was pretty advanced when it was installed, was up 10 years ago or so. Yeah. I think our CIP CT1 project, which went into service in 2009. And that project also was operated on 100% biofuel as this Schofield generating station is. As a matter of fact, when the Schofield generating station went into service, we actually transferred the use of biodiesel from CT1 up to the Schofield generating station. One, because that was part of our arrangement with the commission and with the army. Also, because all told, you get about twice as many kilowatt hours of energy per gallon of biodiesel at Schofield than you do down at the Campbell Industrial Park. Why? Yeah. A lot of it has to do with the efficiency. There's two basic factors to that. The main one is the efficiency of the engines themselves. I mean, reciprocating engines are the most efficient form of power generation out there with the exception of some very, very large combined cycle combustion turbines. But the engines themselves are much more efficient than a combustion turbine or a steam turbine. CT1 is a simple cycle combustion turbine. So that's the main thing. And the other thing is the startup time is so quick, so you don't waste energy starting and stopping. You sound like a guy who's been in and around this heavy equipment for a long time. Can you tell us how you got involved? Well, I retired from the Navy just over seven years ago. I was looking for work. And I got lucky and was hired at Hawaii Electric Company. I actually hired specifically for this project. I've stuck around ever since. It seemed to get rid of me. What happens when it's finished? It is finished. So we've moved on to other projects. And we have a lot of other irons in the fire. Right now we're just doing our final acceptance testing on a 20-megawatt solar farm down in West Lock area. So we do all different kinds of generation. You mentioned about the public-private partnership. Is it okay if we spend a little time on this, Mitch? Absolutely. Go for it. That's the special sauce. That's why they got the award. You can't do this sort of thing without a public-private partnership. You put the land, the technology, the connections together, and then you have to have a public-private partnership. So how does that work? Were you involved in the making, the negotiation, the term sheet for this public-private partnership? Yes. Yeah, I was. So by the time I had joined the project, we already had an MOU, a Memorandum of Understanding, with the Army. The MOU basically said they want Hawaiian Electric to build a power plant on their land, and they're willing to provide that land to us in return for credit for renewable energy and some energy security. And that was about the extent of it. And we said, you know, we want to provide you with this. We took that MOU to the Public Utilities Commission, and we went through a very long, you know, detailed regulatory process to get the approval. What were they focusing on? What did the PUC need from you to be comfortable with this? Well, I think that the main thing that the PUC, you know, they're, as the regulators, they want to make sure that we as the utility are providing value to our customers. So that was pretty much every question was about, that they gave us was about how is this benefit to customers? What is the benefit to the Army? What's the balance of benefits to make sure that the terms are fair and beneficial to all of our customers? So the deal that we worked out was all contained in a lease. So we leased this land for 35 years from the Army. And the terms of that lease basically say that the Army will provide us the land at no monetary cost. But in lieu of providing them cash for the land, we will provide them in-kind consideration. And that in-kind consideration comes in the form of an energy security guarantee. Once we have built this plant and tested it out, we will maintain its ability to, under certain emergency circumstances, carve out a microgrid out of our existing grid that feeds the Army bases, Schofield Wheeler and Field Sting Schofield. Yeah, field provide power directly to those bases from this generating station within two hours of... Guarantees sounds like it's really an important part of the deal. It is a very important part of the deal. And that's the Army was able to assign a value to that guarantee and that value they determined was greater than the value of the land they were providing us. So that's a win for them. They have a parcel of land that they weren't using, provided it to us, and in return they get the energy security guarantee. The benefit to us was we get a parcel of land that we can build a power plant on, which is a little bit challenging to find here in Hawaii. And we got the land for very low cost. And of course that savings, the project cost, is passed along to our customers. And the lower cost for the project and therefore lower rates. So let me unpack it from my own understanding. So they have the land. You take a lease of the land and you bankroll the design and creation of the plant. It's yours. We own it and operate it. And then you sell the electricity. True Schofield and other army facilities. But do you sell it outside the army or just to the army? The power plant serves all Hawaii Electric customers, just like all the rest of our power plants. Because it's all on the grid. It's normally tied to the grid through one of our existing substations and it's dispatched every day and provides power to your house and my house and this EV station, et cetera, just like the rest of our power plants. We're only under certain emergency circumstances of things like enemy attack and hurricane, things like that, where if the army calls on us then we can carve out this microgrid and provide power to them directly. And we also have the ability, the capacity of the plant, 50 megawatts, is greater than the demand that those three army bases normally have. So in the event that everything's working properly and we've microgrid of the army and we're providing that power, we then can expand that microgrid. In the event, let's just say that there was an island-wide outage, we could expand that microgrid to provide power to, for example, the town of Wahewa, certain sections of the town, like the hospital and the fire department to make sure that the emergency services have power. We can also, again in the case of an island-wide outage, we could provide power from the Schofield generating station down to one of our other power plants, down to Pearl Harbor, and use Schofield to bootstrap and start the Wahewa power plant and therefore basically rebuild the grid. Well, because Wahewa power plant needs a cold start if it goes down. It has some black start capability, but this would augment that capability. Oh, very interesting. But the rates you're charging the army would be different than the rates you charge to the grid in general. Is that a special deal? No, they're on their regular payment plan that they were on before. They don't pay any more or any less for the power than any other customer does. The deal is all about, we get the land at no cost and they get the service of the energy security guarantee. The rates remain the same. So what's the guarantee like? Oh, I love this. What's the guarantee like? It's either residential or commercial don't have a guarantee. But in this case, it's military and guarantees are important to the military. They have to function in all oceans, all seas to use the Navy term. So what is it like? How does it work? So the guarantee is that in the event of one of these triggers that's in the lease gets activated, then we have to be able to provide power to the Army service area, which is these three military bases within two hours of them saying that they're ready to receive it. And that's pretty much it. If we fail to do so, then we start owing them rent because we failed to deliver on the security guarantee. But you shouldn't have a problem with that because it's fast-starting anyway, right? We shouldn't have a problem with that. I mean, it's not just the power plant that has to work for this delivery of energy, right? We have to be able to deliver it to the customer. And that involves... So as part of this, in order to be able to execute on this guarantee, we had to make modifications to portions of our grid, install some motor operated switches and some SCADA, you know, supervisory control and data acquisition. Basically, motor operated switches at certain places so that when we're called upon to do that, our folks down in system operations and operate those switches, open those switches to create the microgrid and then we start up the power plant and bring up the Army bases. So did the Army have to do an upgrade of their equipment also? Or was it just your end of the grid? The Army does have... Yes, they do have to do some upgrades at their substations on the bases. Yeah, they have to upgrade their protection relays. That's at their cost. So what about... what about permitting? Because this is on federal land and the authority having jurisdiction is the base commander. So what were the challenges? Did you have any challenges with the permitting? Was it easier because you're dealing with the feds? Part of the feds will have to follow the other... the county's laws. How did that work? Well, that's a really good question. Permitting was a... it's a bit of a... I don't want to say gray area, but this is kind of... this was unique, right? So it was the first time that a lot of people were considering the kind of project in permitting that we needed to accomplish here. So we did an environmental impact statement. Actually the Army performed an environmental impact statement as a prerequisite for federal land. That's as required by the national environmental protection. We, because we were building a power plant, had to do an environmental impact statement under Hawaii state law. So we... the Army did the EIS. We pitched in for the part of it that was necessary to comply with state law. That was part of it. We had to get public utilities commission approval. We had to get an air permit, an emissions permit for the power plant. So we got that through the State Department of Health and the EPA. In terms of building permits, we did that through the U.S. Army Garrison in Hawaii. They provided us the permission to excavate the land and build power plants. You don't need state or county permits for that. That's the preemption. That was a discussion. Who would be the authority having jurisdiction? And so it worked out really well. We built the facility to commercial codes. We built it to city and county codes. All the codes that we're familiar with, which was a great part of this partnership is working out the details of that permit. It could have been very difficult and it could have gone smoothly and the Army really was a good partner to work with. So the Garrison commander when you put that together, that was Colonel Dawson, right? He was an electrical engineer by his background. Yes, Colonel Dawson was the CO during the actual execution phase. All the negotiations happened before him. He was kind of handed this deal and then he was the base commander when he was actually there for the groundbreaking and the dedication ceremony was like his last week in command. He was there for the whole execution part. Perfect shot. You would think from the construction video that it only took 90 seconds to go but it was about 18 months. Can we roll the construction video now? Wouldn't that be a good time? Sure. Just before the break. We do have a break. Here's this construction. It's a time lapse video about 18 months of construction. There's the civil work starting. We're digging all the foundations to move quite that fast as you can see in the video. There's the foundation being poured, the concrete for the main building. Substations being built on the left. There go the fuel tanks in the background there. There's the main building being erected and then in a moment here you'll see the engines being delivered. There's the radiators. There go the engines. You kind of make a blank team system. There they go. The stacks are being erected in the background there. You can see the stacks going up. The radiators right center stage there. The fire water protection tank off on the right. And there you go. There it is. These projects really move. Actually the Army was really surprised. It leads to an interesting question. The Army has theoretically a lot of money. The Army has engineers like Dawson and others. The Army could have done this whole thing and had complete control of it. They wouldn't have had to ask the PUC. They wouldn't have to ask any planning permitting organization outside the Army itself. They could have done the whole thing all by themselves. They didn't have to share it either. They didn't need you. Why didn't they do that? Well a lot of good reasons why they didn't do that. First of all it's not their mission. Their mission is to train and deploy soldiers and national security. It's not really to run power plants. So they didn't really want to do it. Secondly military construction dollars are as tight as anything else. Nobody knows when they might get diverted to some other project. And from my perspective another really important reason is if they had done it they would have just operated the plant when they needed it. And basically in an emergency mode only. They don't want to operate it every day. So it would only have been a waste. It would have been a waste. It would have sat idle for who knows how long and then when the Army needed it they would turn it on. And in my experience when you only operate things when you need them they don't work when you need them. It's the same experience. So one of the things that the Army was really excited about was the fact that we're going to operate this plant every day and we have been essentially operating the engines most days since it was placed into commission. So that if the Army requires the plant for an emergency tomorrow they know that it was operated today. Or yesterday or recently and they have a much higher degree of assurance that it will be ready. Well you know this is this whole affair and the war suggests that you're pushing the frontier here. This is a new kind of project, a new arrangement, a new technology, a new way of engaging interconnecting with the community, all that. So the question is, and you've been through it with it through its pretty much all its life what have we learned here about the future? Where does this extend into the future? Will we see more of the lessons you've learned? What excites you about the future? Given what you've learned. Oh wow, I'm really excited about the future. I think that there's so much going on in this space. In order to get to where we need to go for the 100% renewable goal or requirement we need more projects like this that get us from our existing technology of generation to a mix of technology, a generation technology that will support 100% renewable which this is a complementary, not only is it renewable in and of itself because it's biodefueled but it also enables the integration of more renewable energy because of the flexible nature of the power plant. Right. And so that really excites me. Flexibility. Flexibility. And I think also the fact that taking a large campus like an army garrison facility and us saying, hey, we know that you need backup power. How about we provide it for you and we can use it every day to serve all of our customers. When it's emergency you can have the share of it that you need. That kind of a business arrangement is, there's a lot of potential to grow that business arrangement with other large campuses around the state. And outside the state. And outside the state. Of course, you know I'm concerned mostly about our service area but yeah, those two elements there I think get me. All the great prospects. So you should mention we have more videos and photographs to look at, Mitch. Yes, we do. It's not the time. Let's have a look at those big engines arriving because they're the monsters. Yeah. Yeah, so this is a video of one of the six engines arriving. As you can see from the big sign on the side there they're manufactured by a company called Wortsilla which is a Finnish company. It is from Finland. And so these engines were shipped all the way from Finland in Northern Europe across a couple of oceans. Arrived in Kylo Harbour and then we're put on this large special delivery heavy haul vehicle. And look at all the wheels on that thing. Yeah, there's 18 axles on there and multiple tires per axle. And actually two tractors. You can see one pulling and then there's one back in the back pushing. Oh yeah, right. So this had to be delivered at night because we had to shut down some roads. We actually had to cross over the H1 and shut down the H1 in both directions for about 20 minutes while this crossed over. Wortsilla. Wortsilla. Wortsilla. Yeah, they are a really big company. They're state-owned in Finland. They were the ones who built the ship the Lureline. They expanded the new Lureline years ago and put extra steel in the haul. You remember that story? I know. Then they went bankrupt or something. Oh no. No ship. Oh. Yeah, Wortsilla. Wortsilla is a major company. They started off in ship propulsion engines and then I realized that there's a big market for that in the core-based power generation. So they are one of the main manufacturers of the Lureline. Well, we can actually see a picture of the engines themselves. There they are. Six of them. 8.4 megawatts per engine, which translates into 11,200 horsepower per engine. Wow. They run on three different fuels. Well, they can run on a variety of fuels. We have them permitted to run on three different fuels. Since the plant's been placed in service, they've been running on 100% biodiesel. They can also run on ultra-low sulfur diesel, and they're permitted to run on natural gas, but we don't have access to that fuel. Was there any thought of running a pipeline with Hawaii gas up there? There's a third supply, because they run the pipes underground so they don't get blown over in the storm. There was some initial thought about bringing in natural gas. The supply of natural gas available on the island is inadequate to run a power plant on. It's really just for residential and commercial use in terms of the volumes that are brought in. You'd have to import a lot of natural gas, but in the future, you know that there's a biogas manufacturer or a manufacturer here on the islands. That could be a fuel source that could run these engines. So you're getting your biofuel from Pacific biodiesel? That our current contract is from Pacific biodiesel. And they're the sole source? They have sufficient biofuel to run this plant? Yes. That is something. Yeah, that's good for that. It's good for the Hawaii. It's got to be a fair amount of biodiesel. And they've been a great partner in this and provide us with really high quality fuel. When you mention sole source, they are our only fuel supply contract at the moment. They do compete for that contract. So it's not like a sole source award because they're a local company, but they have won that competitive procurement process the last two times that we've done it. They also do the airport, I recall. They do. They like the whole airport with biofuel. We provide the fuel through the contract with them to the airport distributed generation facility there. So let's look at the rest of the pictures. We're not done. I have one question about the waste heat. Do you do any waste heat recovery at this time? No, we don't. We did consider that. But the benefit that we would get relative to the cost was pencil out. With reciprocating engines you get a lot of waste heat from a combustion turbine. From a reciprocating engine there is waste heat, but it's not of the quantity and quality that really comes from. Got it? What do we got left? Probably there's the plant up from up above. I think probably most importantly if you could show that picture that we had queued up for my boss there. There he is. This is a picture of the day. That's what it's all about. That's right. The handsome Alan Oshima receiving our award from the Association of Edison Illuminating Companies. I believe that we were one of four awardees out of, I think, 80 or so awards that were considered. It was a award to us in Naples, Florida for a recent meeting. Well congratulations go to you. I think it's terrific what you've done here and it's more to come. Yet another chapter for developing renewables here in Hawaii. It's a major step forward with all kinds of promise and prospect going forward. Thank you very much. I appreciate it. Thanks for the recognition and the time to talk about it. It's been a lot of work over the last couple of years and it's been very successful. You can do us a favor though. You can send us through your vast network of people on your email lists at Hawaiian Electric so they can see the show and get it out there. Thank you to you guys and it would be very helpful for us too. Mitch, what are your closing thoughts on this? Where does this take us? What does it mean in the larger firmament? Well, first of all it's an innovative project. I think the partnership between the Army and the public and private companies is the way forward. We're doing that in other areas like in transportation services contracts. The big island has developed a concept or not lag. We actually passed legislation to do that. So now instead of piece-mealing for example building up a fleet of buses you can go out and order 40 to 50 buses in one shot because the private company is paying for it. Plus all the infrastructure to supply the fuel and very important the operation or certainly the maintenance of it. So that's the same kind of a project and that was made in Hawaii. That's really unique. Made in Hawaii. So what you did is unique too, made in Hawaii. Well, we got all these great projects and we have to keep on doing them. We have to keep the public informed about them. We have to keep the level of excitement up. So, you know, thanks very much Mitch Ewen and Jack Shriver, thank you very much for coming down and doing this. And wow, we have to do more. So we'd like to follow up with you in a few months and see how it's doing and see on your plans for the next one. Sure, I've come back and talked a couple months about our solar farm that we're placing into commission here shortly. Okay, thank you. Appreciate it. Thanks Jack. Gentlemen and a scholar. Aloha.