 This is Think Tech Hawaii, Community Matters here, one bingo, we're here, we're back, it's Wednesday morning, I'm Jay Fidel, this is Think Tech, and this is, let me do this carefully, this is Mina, Marco and me, San Mina, she's not here. But Marco is here, in the flesh, in the studio, we love that, welcome to your show, Marco. Well, the sign says there, thanks for having me on the show, so that's something I can agree, and my eyesight is not poor enough, I mean, this is really a treat to be able to have you two times in a week. Fabulous. I can only hope we'll find something to talk about. Why do I feel we will, we can, we will. So let's see, what do we talk about, let's talk about energy, Marco. The first thing is, let's talk about solar power that you brought back from Tibet. Solar energy, of course, keeps the planet going, causes things to be green. Without it, we would be one sorry species, right? So I thought, in honor of your continuing fight, fighting the good fight, on behalf of us in Hawaii, and all sentient beings, that I would present you with this little token, formally initiating you into the practicing prayer wheeled club of Hawaii. And this is a solar powered prayer wheel, it is from Lhasa, Tibet, and this is a solar cell right here, so as it's pointing out towards the sun, it does not need direct sun, in other words, defuse sun will do it, you can put it on your car dash, this little wheel actually does spin, as it's doing now. And there are actually teeny tiny prayers inside, and as the Buddhists in Tibet and places like Bhutan and other places believe that as it spins round and around, it sends its prayers to the heavens for the benefit of all sentient beings. So congratulations, you're the first initiate here in downtown Honolulu, so you are going to hopefully start a trend. Yeah, well I know that they're all going to be envious, they're going to be stopping me on the street congratulating me, and being envious at the same time. I will find a treasured place for this, Marco. Well, you are most welcome. Great statement of energy, a perfect gift, perfect. But let's go further than that, leave it there. Let's go further than that, let's talk about solar in general, so much is happening. You sent me an article from the Wall Street Journal a few days ago, it really left a tattoo kind of impression on my thinking about where solar is going, you want to summarize that? Sure, in fact I've been engaged in a bit of a dialogue with that reporter just in the past, a handful of hours, Russell Gold, he writes out of Texas and he's one of the energy writers for the journal. That specific piece was looking at utility scale storage, battery storage, and specifically how it is offsetting the need to run what are known as peaker plants or peak demand plants. So if you can provide peak demand, if you can satisfy the peak electricity demand in the service territory with batteries rather than running fossil fuel, cost effectively, now cost effective of course is critical because as I've said for a number of years it's not, renewables at all costs is cost effective renewables. So if the batteries can be charged by renewable energy rather than say fossil fuels, then that reduces the demand for peaker plants which are typically more expensive, less efficient to be able to meet some utility demands. And that's only- We have one here, we have a peaker plant in Kapolei. I've seen it, I've walked it. We had an OC16 show about that plant. Oh, I'm electric. It's beautiful, high tech, brand new, well it's brand new. A few years old, relatively speaking, it's brand new. And it does exactly what you said, it ups the game at the critical hours of the day when it's necessary and then it's not necessary after that sort of comes down again. So we're beginning to see a number of kind of path-breaking utilities in our state and also in the mainland that are moving forward with these larger scale storage plans and integrating them into their network. So it is certainly a work in progress. We're not, we haven't hit any type of critical mass by any means in terms of mass deployment of storage. And it's a real challenge on the part of the utilities to try to determine what ideally is the best mix. And again, we're going where no utilities have gone before in this state in terms of trying to figure out what the best mix of utility scale renewables is along with rooftop solar along with utility scale storage at substations, let's say power plants and also much smaller scale storage at people's homes. And how is it all going to mesh together, work properly, to create an interactive, interdependent, resilient grid that we all aspire to see? And as we've talked about, I think earlier this week with Mina, one of the examples that has kind of blown away a lot of us is Puerto Rico and the fact that that's an island that's suffered beyond serious devastation. Puerto Rico is the ghost of Christmas future. The ghost of Christmas future, yeah. And on the fact that now five plus months after Hurricane Maria, there's still 30, 40% of the population that don't have a reliable access to power or five months later. So are we in a precarious, as precarious situation? I mean, Hawaiian Electric will say, no, no, no, Ron Cox is one of the VPs. They are senior VPs at Hawaiian Electric, did a piece on the advertiser in the past couple of months saying, we're watching this very carefully and we're not as much at risk. Well, he is watching it. As Puerto Rico. He spoke in the National Disaster Preparedness Training Center meeting in Waikiki two weeks ago. We saw him. We have footage of him speaking and he cares a lot about that. I think he's like the designated person at Hawaiian Electric to care about that. And he's got some good ideas. The question really is unknowable until something happens. And something is likely to happen pretty soon because we have climate change and we have El Nino coming this summer. And we have, call it the, you know, it's kind of a random analysis of, we have not had a path of a major hurricane come through Honolulu yet. So that means the chances of one coming through Honolulu now, right? The chances are greater. Anyway, so if that happens to Honolulu, we're going to find out, you know, how well prepared we really are. Right. So this is on the Hawaiian Electric road map and another one of their VPs, Bob Eisler, is kind of heading up there as I understand it, heading up their efforts in terms of looking at battery storage and where it's going to be deployed first, how it's going to be deployed, how much is going to be deployed. So it's really a fascinating time from those of us in the trenches as solar contractors, homeowners who have yet to go solar who are looking at batteries, that are looking to deploy it as it makes sense. I mean, KIUC being the leader in the state so far in terms of deploying. And David Bissell spoke yesterday. My friend, David Bissell, you know, has really been the captain, you know, great captain of the KIUC ship. They have one PV plant that will be going in with storage in addition to the existing one with solar. So Tesla exists. That's already up there. AES is going in. Right, right. He's also building pumped hydropia. Right. Right. And he's way ahead on this whole notion of storage, however you frame it, with photovoltaic. And he's not doing wind. They had a bird environmental problem. And I guess they have people in Kauai who don't want to do that. So there's no wind on Kauai. There won't be any wind on Kauai. And, you know, you talked about the evolution of the mix, so to speak. Well, the evolution on Kauai is real simple. It's photovoltaic and storage. Although they have a certain amount of begas going on, you know, they have They're still burning begas? Yeah, they have. I'm not sure that's the right word for this. This is agricultural product. They cut down the trees, you know, junk trees. Right. It's not begas as far as I know, because I don't think there's any commercial cane on that island left. Okay. It wouldn't be begas, but it would be agricultural material. It's biomass. Biomass. Thank you, biomass. And they have a big factory there. We saw it. We filmed it. Made an OC-16 show out of that, too. And that's really going great guns. They burn it from the heat. They have a turbine that creates power and they send the power to K... Yeah, you see, as a contractor has this, it's quite a big facility. Right. And I can't give you the numbers on how much percentage of the total, but it's part of their mix, for sure. Well, I suggest to you, though, as in Kauai, this whole thing is going to evolve into photovoltaic and storage. And we're seeing that with the recent announcement last week, with Hawaiian Electric Miko and Half Moon Ventures in Chicago, we talked about UNI and MENA on Monday, that this plant on Molokai, which needs regulatory approval, permit approval, all the logistics have to fall into place in a relatively short order, even though we're only in February 2018, excuse me, they have to get it up and operational more or less by the end of next year. So this would be... To get the tax credit. To get the tax credits, right? They're also tapping into the so-called new market tax credits with Pono Shim that's a big part of the equation. So from what I can tell, they're leveraging the tax credits to the Hilt in order to pull this off. But if they're able to do it, bring it online, it's a very big leap for Hawaiian Electric to do this. So Molokai is a small service territory, about 3,000 customers there. And it's got one power plant and one power plant only. Fossil fuel. Fossil fuel. So if you can turn that island to close to 100% renewable or certainly 90-ish percent with one solar plant and one battery, that's really a big deal. So I'm very pleased that Hawaiian Electric and Half Moon were able to come to terms on this. And since it's a power purchase agreement, it means that the risk from Hawaiian Electric's perspective, I think, is less than if they were to own the assets themselves. That's the harder slog. And Hawaiian Electric has shown over the years to be somewhat averse to actually owning utility-scale PV generation. That's exactly what David Bissell said yesterday at the Harvard Club. It's better to have the contractor own it because the contractor is expert in this sort of thing. And he's the one who installed it, so let him manage it. And you pay for his management, but it's OK because you're going to get a better product that way. Yeah. Well, and Hawaiian Electric, I believe, they have received approval or are about to get approval to issue out requests for proposals across their service territories for multi-mega-watts of renewable energy, which most likely will be third-party-owned with them, the third-parties proposing contracts of multi-year duration at a favorable rate for all the rate pairs. It'd be great if we could collectively get enough of these PPAs nailed down where the price of electricity would plateau. And ideally, ideally, without being an economist, I don't know how real this is to be able to start a downward trend. I mean, that would be truly remarkable. I don't know how likely that is. But the article talked about that. It talked about the peaking plan for a kilowatt hour. And this would be higher than the average of what they are charging people, but it was like 87 cents for a kilowatt hour during peaking by virtue of the peaking plan. And it was way less, I forget exactly what, it was in the thirties or something for the storage and battery affair. You've got to get less than that. And the question I want to put to you is we have two factors going on. One is it's the termination of these tax credits. Both of the federal tax credits are going to expire sometime. And query whether in this administration they're going to be renewed or not. The administration is not so interested in renewables and environmental issues as earlier administrations. And the second thing is we get the tariff. This administration puts a tariff on affordable tax. Those two factors work against this dream result of having PV and storage all over the country. I'm reluctant to go too far down the road in terms of forecasting. What you said is absolutely correct that when you have the hint of a trade war perhaps brewing and an increased cost of affordable take modules coming into the country, that's surely not a good thing. But at the same time the numbers that I've seen so far show the increase in affordable take modules to be rather nominal when it comes to the entire cost of the installed system. I mean it's not going to go down certainly but it's going to be more an incremental increase. The Solar Energy Industries Association or CIA for short based in Washington was forecasting a job loss of I think 24,000 if these were to be approved. This was prior to the White House decision. How hyperbolic that is, I really don't know. Clearly if you're trying to fight against something you want to play up the boogeyman nature of it but it's certainly not a positive thing. And 2017 saw in the biggest market in the country which is for solar which is California saw the number of new installs go down for the first time in years and years. Now part of that is weather related because California was socked first part of 2017 with torrential rains and go figure now that it's kind of on the flip side of that. It's not drought conditions but a lot less rain. So there's just so much to play. Well one thing is clear is that this is becoming a national issue. These questions are being raised nationally in many states, many cities. And when we come back from this break Marco I'd like to talk to you about where companies like Nexterafit where there'll be another merger or acquisition in our future somehow because of these national trends. And I'd also like to talk to you about one thing you raised earlier and that is the need to have a mix between utility scale solar and single family or single building solar and how that fits with the need to vary the power lines underground in the case of disaster. Oh wow we'll never finish. Big bucks, big bucks. We'll be right back after this break. This is Think Tech Hawaii raising public awareness. We're back with Marco Mangelsdorf here on Mina, Marco and me, son Mina. We're back with Marco Mangelsdorf here on Mina, Marco and me, son Mina. We. We. Little French never heard anybody. And we're talking about energy, of course, it's so interesting to, you know, and thank you again for being in the studio with us, Marco. My great pleasure, Jay. So some of these leftover questions, there's about a million of them. But you know, we have, we have national trends going on. I mean, you know, go back a few years ago, Hawaii was like the only one on the screen. We were, you know, a leader, and we were an icon, everybody wanted to see what we were doing. Now, a lot of places. And the article that you sent me, Wall Street Journal article, talked about next era. And next era was doing big time, big developments in solar and battery. You know, we worried about that during the approval process, people didn't think they would do that. Well, they are doing it. And they're doing it outside the state of Florida. They're doing it in other states and other cities, and they've gone national. And that seems to be, you know, it seems to be consistent with the national trend here. We're doing bigger. We're doing national with national actors. And I wonder how that affects Hawaii and whether next era or somebody else will be back. Next era still has a lingering interest here and maybe a future interest. What's going to happen? Well, as far as I'm being back, I don't have any inside information on that. I mean, both Hawaiian Electric Industries and next year I gave it the old college try and then some in an effort to have Hawaiian Electric be purchased by next era. And that failed due to a regulatory decision. And there's no doubt that the Hawaiian Electric Board gave very careful, careful, careful, one more careful, careful consideration about moving in that direction with next era energy out of Florida. And it was a, this is, it was all part of the discovery process on that docket. Yeah. And like, You followed that. You were in the docket. The Hawaii Island Energy Cooperative was a intervener on the docket, so I was reading quite a bit of that intel. And they came to the conclusion that was going to be a good move for the company, good move for the shareholders, good move for the state of Hawaii. And it was the rolling of the dice, which they believed was standing a pretty high odds of being able to, to, to win the big prize, right? And it didn't happen. And that was a tremendous amount of effort on Hawaiian Electric's part, next year's part. So the appetite that Hawaiian Electric may or may not have to roll that dice again. It was a very heavy two, but it, it took a lot for them to get to the point to roll the dice with next era, which was a bold, innovative, It was indeed. I agree. As far as utilities go, company on the mainland. Is it a vant guard move? And as you mentioned, part of that Wall Street Journal piece is that next year is doing a project in Tucson with storage that is going to be a path breaking project. So next year is living up to their, their reputation of being a more progressive utility company or, or, or utility group. As far as them getting back in the action here, I can't comment on that. As I think we've talked about kind of in passing, it was interesting to see that for the Koleen Hanabusa, for governor campaign, the two of her contributors, because it's all public knowledge, of course, Eric Gleason, who led the charge here for next era and who I got a chance to know and have a lot of respect in law for. And his boss, Jim Robbo, who's the CEO, they both contributed the maximum amount to the Koleen Hanabusa for governor campaign of 6,000 a pop. And is that some indication they're interested in getting back here? Or is it just a way of giving their friendly salute to a governor, Governor David Ike, who was demonstrably opposed to, yeah, you recall that. Yes, I do as well. So I think it's going to be my, my channeling the Hawaiian Electric Industries Board, which my, my insight into that is extremely, extremely limited. It would be rather extraordinary if they were to find another suitor, I think, who would come up with a juicier package that would stand a better chance of being able to get regulatory approval, especially in light of the approximate year and a half of that got to be being open. Oh, that was such a hassle for the next era, yeah. And they would treat it, you know, with a lot of disrespect may I add. But anyway, but there is, you would agree with me though, I mean, and this is the implication of the article, these are national trends. These companies are doing projects way outside their, you know, original geographical areas, and we're going to see consolidation may not be the right word, but we're going to see national events, national developments taking place, no? No, undoubtedly. I mean, the storage is, when energy storage is being hyped and fond over two, three years ago, I thought, oh, here's just yet another hot topic that people can get all excited about that has a lot more smoke than actual fire. Well, the smoke has been going on long enough that there is actual fire there now a couple of three years later in terms of who's in the market. Tesla based in the US with Elon Musk and then the superstar that he is. And, you know, it's great that Falcon Heavy launched and then he said prior to the launch, he said it's either going to be one heck of a launch or it's going to be heck of a firework show as in blowing up on the launch pad. So Space Man made it up and it's on its way. Actually, I heard the trajectory is that they were a little bit off and they're not going to get to Mars, but they're going to shoot past Mars into the so-called asteroid belt. So the point being is that you have major players, whether it's Tesla, LG Chem out of South Korea, Samsung out of South Korea, Sonan out of Germany, Mercedes-Benz out of Germany. And if you look at the largest battery making facilities of this type of battery in the world, according to Bloomberg, number one is the Gigafactory outside of Reno. But then there are eight or nine Gigafactory-like scale plants that are going in China and in South Korea. So where is all this product going to go? It's got to go somewhere. These people who are spending hundreds of millions of dollars to develop these production facilities aren't doing it because they think it's going to sit on a shelf. And further, you know, it's likely with the new technology it's likely to be cheaper or at least cheap enough to be competitive against fossil fuel. So this could be the best time we ever had. Well, let me ask you this question. You referred to it earlier. It's the mixed question between utility-scale solar, which seems so efficient, and rooftop solar for smaller residences and buildings. We're still, the jury's out on which way is best. The mix is not yet established. Hawaii will learn more about this going forward. One of the elements is, suppose we have a storm. Because the storm is not going to knock off the battery. The storm is going to knock down the poles. And if the poles knock down, you really wish you had something on your roof. And I don't know how that plays, but I wonder what your thought is about it. Well, full disclosure, my company is a Tesla energy dealer. So we have been installing, in fact, I installed one of their power walls on my very own home. And I've had a net-mitted system now for the past several years. Is it working OK for you? It's working fantastic. And I've tested it in a simulated grid outage. And it provides, I don't use a whole lot of power, but it provides power for my entire home. So it's back up for the entire home, which I think is a substantial retrofit market for companies like mine to be able to offer the 80-some-odd thousand net-energy-muted customers across the state back up battery retrofit in order to provide that resiliency and redundancy. You can't make a ROI return on investment argument because it doesn't produce power. It stores power. But you look at it from the perspective of, we're the most insured we've ever been as a species. We pay for car insurance and health insurance and life insurance and liability and pet insurance, insurance, insurance, insurance. So are we at a point now where they're going to be more and more homeowners are we thinking, does it make sense to pay an insurance policy to have the security and peace of mind of battery storage in case the grid goes down? Now, if you had asked the people in Puerto Rico last July, that they would have, no, I'm not worried about hurricanes wiping out the island for four months. So people here, they would say the same thing, right? Right, so there's nothing like an adverse weather event to get things top of mind awareness. And I brought back to the image that you've probably seen of Hurricane Aniki 26 years ago. It went in a lateral line south of the Big Island, almost straight line south of South Point, and then made, much to everybody's surprise, a sharp 90 degree right hand turn straight up and blasted the garden aisle. So when is the next one going to hit? You don't know, I don't know, we don't know. But we're in a more sensitive part of the world in terms of those type of events. So having more storage deployed strategically with a mix of utility scale solar, rooftop solar, will do nothing but increase the interdependence as well of the individuals who are companies that put storage on. And also I think over time lead to a greater resiliency and redundancy of the grid to be able to stay on during adverse events. But we're truly, Jay, we're truly going where no utilities have gone before on this kind of scale. So you gotta take our hats off to folks like David Bissell and Kei UC and the folks at Hawaiian Electric that have a bunch of smart people who are really dedicated. And we all want the same thing, more renewables, get to 100% in a cost effective way sooner rather than later, have us be less dependent on these long supply lines of oil and other fossil fuels coming from great resources. And more security. More security, right, right. So to have security, it seems to me that the underscore here is to have security you really need to have both. You know, your house for example, just take it as an example. It will go indefinitely off the grid. Indefinitely, yes. And most houses don't have that. You gotta have both the PV and the battery. And I think, you know, people don't understand that if you took a survey right now, my people say I'm fine the way it is, I'm not gonna change anything, including the people who are on the grid but have PV on their roof without a battery. And after El Nino, after whatever happens this summer or the summer after that, maybe that's gonna change. In the end, I suggest to you that we will have both. Why? It could have cost more, but we will have both because of security. Right. And the price of batteries will go down. There's no doubt about that. I think it's gonna be more gradual rather than off the cliff, decrease in prices. And, you know, typical adoption curve is you get the first adopters who are willing to be the first ones out there and then they talk to their neighbors and they talk to their family and they're pleased with being able to have that. Plus, I gotta say that the app that Tesla came up with, which I'm not big on apps, not at all. The cell phone app. It's on your cell phone, you can see as long as you have internet access, wherever you happen to be on the world, you can see how your system is operating. And for a wonk techie guy like me to be able to see what my solar produced yesterday, what my battery do, how much did it offset my utility usage? I mean, it's really way cool. So, I think there's that part of us that are the consumer, which some don't give a darn about that kind of stuff. But a lot of people, the ones that I've come across so far think it's really cool. So, and that's, you know, got a hand at Elon Musk that he has, of course, no shortage of detractors, but he's onto something. He's onto some really cool things, some really big things. And as I shared with my students when I taught UC Santa Cruz last year, companies like Tesla, they're not selling near term, short term profitability. He is selling hope for the future. Vision. And that's kinda short in supply sometimes. And that points out one bottom line point that I think we have to always keep in our minds, that technology is getting more disruptive. There'll be bigger, better technology. People can copy that app, or at least the functionality of it. There'll be another app, there'll be another idea who knows with artificial intelligence. So this is all gonna get better, more efficient, and hopefully cheaper. Thank you so much, Marco. We're rocking in the free world. You know, you're great on the phone, you're even better in person. Thank you. Thank you. I thank you for that. I'll be spinning, spinning, sending all powerful positive messages for all sentient beings. I feel it. On your dash. I feel it. Whoa!