 All right, it's a cutting edge, Energy 808. I'm Jay Fidel, this is Think Tech, and as you know, Marco Mangostoff, a Provision Solar, is on the other phone and we are talking to him now for Energy 808. Welcome back to your show, Marco. Well, it's a wonderful day in our neighborhood, Jay, whenever I get a chance to talk to you, my friend, so thank you for having me on and having it be our show. Yeah, well, you know, we just submitted one to OC16 and it includes all the energy shows, including Energy 808, and one of them is the one with Jay, Jay Griffin, and that was really a good one, I might add. That was a few weeks ago, so. We have a good show going, there's no question about it. That good old fashioned Ed Sullivan used to say, we have a really big shoe for you all, really big shoe. Okay, so online today, we're gonna talk first about these two charts and the pattern of increasing renewable energy or not in the state of Hawaii, and then we're also gonna talk about KIUC and the recent outage and what it means to build a resilient system. So let's talk about the graphs first, and I suppose I'd like to hear you introduce the graphs and then we'll put them on the screen. You know me, Jay, part of my pleasure in life is to data crunch and data analyze, and there's all kinds of interesting stuff out there regarding the energy use patterns of our beautiful Loa State, and our friends at DeepBed came up with their annual Hawaii Energy report last week, and I've also been doing some of my own data crunching as well with some friends, so I'm just trying to kind of see a snapshot in time based on 2017 data, because that's the most recent apparently that's actually available and not 2018 is what kind of energy are we using? This is kind of an odd way to put it. The energy that we are using, where is it coming from? Now, where is it coming from? Literally, as in as a shipping from Alaska, as a shipping from Malaysia, but where is it coming from by source? And over time we can judge whether we're making progress towards becoming more energy independent and more energy resilient by not being so dependent on energy sources, principally petroleum, that come from a very, very far distances. So I think one of the things that's still so striking to me is if you look at energy consumption, total energy consumption in the state, which typically is going to, and I see on the screen there is on the right side is the brown pie chart. What's so striking to me is that the percentage of energy supplied by oil, by petroleum products is still incredibly high as in, in this particular pie chart, 83.9% of coal at 84. And regardless of the intentions, the good intentions, the well-meaning intentions that go back decades, you know, kind of peaking perhaps at the Hawaii Clean Energy Act signed with a bunch of hoopla now at 11 years ago, that we still remain shockingly, shockingly, dangerously dependent on oil coming from great distances to power our society, our economy. So I think that to me is the number one takeaway. We've made some progress in terms of electricity production coming from other sources other than oil, but at the same time, we're close to 70% dependent still on petroleum for energy production, at least according to 2018 figures. So we have a tremendous distance to go. And I really feel a greater sense of urgency now that I did a year or two years or five or 10 years ago that the progress we're making is just not enough. It's not enough both for our state, it's not enough for our country, it's not enough for the planet to get off this dam petroleum kick. And I'll just remind you what I've heard in the past. And I assume with justification that Hawaii uses more oil to generate electricity than the rest of the continental US combined. So yes, we make progress. Yes, we're the most polarized state in the country per capita, both solar thermal and solar PV. But my goodness, do we have a long, long ways to go and we need to accelerate our efforts, double, triple, quadruple them in order to move faster. Couple of reactions and thoughts, Marco. Number one is, gee, I guess it was five or six, maybe more years ago, at the Hawaii Energy Policy Forum through the efforts of Karl Friedman there was going to develop an index, an index of renewable energy and including, you know, non-renewables also. So that we could get a handle on this. The idea was to follow it on a periodic basis. So we would know how much progress we've made. I haven't seen the index for quite some time. I'm not sure that there is a current index. And so I'm not sure that we're gonna, that HEP, FY Energy Policy Forum is gonna continue that. But it seems to me that somebody ought to do it. The other reaction I have, as you said, that the last one that DBED did through the Energy Office, I guess, was the one for calendar 2017. That's two years ago. I mean, if this is an important initiative, we need to have current numbers and we need to have them right away. We need to have them immediately after the year is done or as soon as possible after the year is done so we can get a handle on where we're going. So the legislature can take appropriate steps so the policy makers can, you know, develop policy and how you get from here to 100%. And I certainly agree that there's, you know, not that much happening according to these charts. So how are these charts created? How do we get the information that is on both of these charts? Let's take the one from 2017 first because that was the one that DBED did, huh? I didn't necessarily said DBED did it. I said that the one with the brown pie charts, Hawaii Energy Consumption by Source 2017, that was put together by myself and some associates. So there are other charts, pie charts in the Hawaii Energy Report that DBED released last week about electricity production specifically that does date back to 2017. You know, in terms of getting more timely data, the Energy Information Administration, which is a part I believe of the U.S. Department of Energy, they are responsible for, perhaps a little bit more real-time data, including 2018, so that the blue pie chart, which you showed on the screen a few moments ago, Hawaii Electricity Production by Source 2018, obviously 2018 is a little bit more recent than 2017. I don't know, where else to go with this. I was struck by, in terms of Hawaii Energy, Consumption by Source back in 2017, that after petroleum, the second largest source was coal. Let's see the 2017 chart, so we can check on what Mark was saying. That's it. Was coal, which is kind of interesting because as far as I know, the only place that is burning coal now is the AES power plant on Oahu, which is scheduled to close no later than 2022. So obviously that number will come down, but then the third largest energy source by consumption is solar and that 4.4% is a combined combination of solar PV, photovoltaic, converting sunlight to electricity and also a solar thermal or water heating in this case. So, you know, I'm hardened as a solar guy to see that in terms of consumption by source, at least as of 2017, that solar was the second, third, excuse me, third largest source of energy, not just electricity production, but energy at large, whether you're particularly measured in BTU's or British thermal units, that solar was number three. You know, albeit, you know, 4.4%, we have a long ways to go. So, yeah, it's just, you know, it's gonna take time and it'd be great if there was a way of measuring pie charts and comparing pie charts over time, but God, the size of the brown oil and that consumption by source going back to 2017 is just, it's shocking, Jay, it's shocking. You know, there's so much talk about renewable energy in this state and about what Hawaiian Electric is doing, KIC is doing and what we're all doing. And yet, you look at this pie chart and you're thinking, my God, it's still so much damn oil coming into the state. How long is it gonna take for us to really cut that 84% of the pie chart down to 50 and less? I mean, actually, just have such a long ways to go and try not to feel discouraged about it, but when I see pie charts like this, it just kind of wax me from my, you know, not that I'm complacent to begin with, but it just, yeah, it kind of takes my breath away. Well, and, you know, in 2040, which is Hawaiian Electric's number a year in 2045, which is the state target, that's not too far away. That's 20 or 25 years. I mean, that's, you know, we need to work much harder. So what's gonna happen in 2019? Do you have a handle on what 2019 will look like as against 2017, 2018? Well, 2019 will be show zero geothermal in terms of electricity production. Back in 2018, it was 3.2%. I don't think anybody can in their right mind make a case that put a geothermal venture will be putting out power and selling it to Helico by the end of the year. At least that's my take. I think they still have fair amount of this road to travel before they go online, if they go online. And they have the only hold, you know, cultural resistance that has always existed. And who knows that may be exacerbated by what's going on in monarchy. Yeah, but the monarchy stuff is just a whole another subject that we could spend hours talking about. But so geothermal is not gonna happen most likely this year. So a solar, the solar percentage will go up. Biomass, which is essentially age power there on Oahu, I think will be pretty steady. Coal will be pretty steady. Hydro will be pretty steady. Wind will be pretty steady. So I think the increase in renewables for 2019 will be a marginal increase. I see KIUC probably hitting somewhere over 50% in terms of their total generation will come from renewables for this year cumulatively. I think Hawaiian Electric is gonna be pretty darn close to where they were last year and where they were in 2017 when they hit 27% in terms of their renewable portfolio standard percentage which they need to report to the PUC on an annual basis. So I can't make the case that 2019 is gonna look all that better cumulatively than 2018. So what's our big hope? You know, one of these smaller slices in the pie eating the larger oil slice. Is it solar? You know, what is gonna be the driving force going forward to change the pie? And if it's solar, how do we get there? What do we do to increase the solar slice of this pie? Because to me that's the most promising renewable we have. Well, one of the things we don't do is ramp down the state's renewable energy investment tax, renewable energy investment technology tax credit who would talk about a mouthful. We don't ramp that down precipitously anytime soon because the tax credit is very important component in terms of encouraging solar. I would also, as I've been lamenting for the past four years, I think it's very important to have a separate tax credit for battery storage, for adding battery storage to existing renewable generation because that's a very critical part of getting to where we need to go. What else can we do? I think the commission and Hawaiian Electric need to come up with some type of strategy to incentivize better incentives to be able to incentivize people providing power to the utility company when they needed the most. When they needed the most is during peak power, typically between 5 p.m. to 9 p.m. on a seven day a week basis. I don't believe the incentives are great enough that encourage people to be sharing their storage solar power with the utility company and it needs to be at a more advantageous rate. So if I had my druthers, I would like to see a more lucrative remuneration tariff or schedule to be able to incentivize people to provide power to the grid when they need it the most. So those are a few things that come to mind. It's all about incentives and it's all about changing public behavior through incentives. And I don't think the legislature is really hot on this issue. They haven't done anything on that storage credit bill in too many years. And I actually worry that the momentum that we had a few years ago about developing renewables and clean energy may have lost some energy, excuse the expression. Do you agree with me on that? Yeah, yeah, you know, being on the neighbor island as I have been for close to 20 years, I'm not perhaps as, you know, we're not tied in as closely kind of the pulse of the main action there on Oahu. So it's more kind of a little bit of impressionistic feeling I have, but it seems to me that we have lost some of our oomph. And I don't want to point fingers because that doesn't do any good. Although there are a number of entities or individuals I think are worthy to be pointed at. But we have, I think we've lost a bit of our mojo as of late. And I'm not really sure what to do about it. I mean, I know that the state is recruiting for a new director for the Hawaii State Energy Office. It'd be great if there were someone dynamic, you know, super energetic, whether they're from the state or not, I don't know. But we just, we need more visionaries, Jay. We need more people who are disruptors and who are posing, who are willing to push the boundaries. And I think part of our culture here, both kind of sociologically and business climate is, you know, don't stick your head up above the firing line too high because it's gonna get whacked off. So I think there's kind of a tendency towards risk aversion here on multiple levels. And I just don't see that being, I don't see that suiting us well at this point in the state's evolution. So I'm all for bringing more visionary disruptors to the forefront and that takes a lot of courage. You know, it takes the willingness to take a lot of arrows and it just don't seem to be all that many people out there who fit that bill from what I can tell. Well, that's a perfect segue to the second part of our show. You know, I recall David Bissell more than one of our programs at the Energy Policy Forum, saying that you had to appreciate the risks because this is new territory and trying to make a plan to cover the whole state in a thing that's so critical to our daily lives and our economy does has to involve a certain amount of risk. It's new territory. And he said, once you appreciate that, then you make your choices. And of course, one of the big choices KIUC has made is to go solar in big solar facilities with batteries, I might add. But, you know, a week or two ago, they had an outage. And we should talk about that. We should talk about that in terms of taking the risk and how we can ameliorate that risk even further going forward. You got any thoughts? Yeah, and one of the worst situations for any grid operators when you have a failure in terms of a generation goes offline and it gets worse and worse when that failure comes from, let's say, your largest generator. And if I'm not mistaken, I think that was the case on Kauai a little over a week ago and that caused substantial disruption, obviously, in terms of people being able to use electricity there. And David Bissell and his crew there, KIUC, I think have done a fantastic job at integrating utility-scale solar and storage and they've been very aggressive over the years and I really salute them for that. So what happened, essentially, is that you had this substantial failure of the main generator going offline and you had solar and batteries that have been deployed on the utility side of the meter. And as it turns out, the weather was kind of poor those days, so when the weather is poor, now there ain't much solar generation and those batteries are not designed to provide power for 24 hours. No, just a few hours. I remember touring the facility there. It was a Tesla facility and it was only a few hours. It might not even be overnight. So there was a combination of, essentially the poor weather and solar wasn't able to do much. The storage wasn't able to do much and that kind of reiterated to me something I'd been pondering for quite a while, which is it's all well and good to talk about getting to 100% renewable power generation by such and such a date. As a techno interested guy, I asked myself how are we gonna do that, practically speaking. And I foresee and I believe strongly that at least for the next couple of decades that there will have to be, continue to be a combustion generation on all of our island to be able to provide that backup, that backbone, that resiliency for when the sun don't shine for days upon days. So if you buy my argument here that combustion generation is not gonna go away any time soon then the juicy question is what alternative fuels can we use for these combustion generators and in the case of my island, we have combustion turbines, two of them each, K-Hole, which is the largest plant on the island, 80 megawatts and two of them at Honokah for homo-quantity. So I know for a fact that these general electric combustion turbines, other companies including Mitsubishi have been looking at alternative fuels other than typical petroleum products and I happen to be particularly interested in the potential for using H2 also known as hydrogen to be able to power these turbines because if we can produce hydrogen at a cost effective rate and also adequate supplies of it and in the state around this island, then that solves a really critical part of the puzzle here that we do need combustion generation and we will continue to need combustion generation for decades to come as we deploy more solar as we deploy more batteries and we need to have a fuel source that is reliable, cost effective and environmentally clean and benign to be able to power these combustion turbines. That's my little speech and I'm sticking to it. Now you know, I didn't send this to you but I saw yesterday a very interesting YouTube video, in fact a series of YouTube videos about making hydrogen from water. Needs a certain amount of electricity to do that but at the end of the day you get more hydrogen than you would get using an electrolyser. And it's done with catalytic agents that are available. And so this one video I showed a guy with a scientist who created a gizmo that will fill his car with hydrogen. And of course when you add the hydrogen to a fuel cell you get a secondary effect in terms of the efficiency I believe but what I'm thinking is that we have been focused on electrolyzers. I know Hank Rogers and Big Island has one to create hydrogen but there may be other ways to do it and maybe they're more efficient and maybe in the future we'll have more hydrogen. It's very promising hydrogen, although it's not there yet. The other thought I have to respond to you is LNG. We have a sort of guest host, the item of Lucian Puderisi who is the CEO of an energy think tank in Washington who we visit with here on think tank every couple of weeks. The show is called Energy in America and he talks about LNG. He talks about LNG as a bridge fuel, as a popular fuel not only in the United States but everywhere. It's a big export item and it's gonna be more so with these tankers and it's going in through Japan to Asia, Europe is using it and it's cheaper, cleaner than oil. So if you're looking for a sort of step transaction to move us into a better fuel, although technically still a fossil fuel, LNG is a real possibility and better than oil and I think the world is moving that way according to Lu Puderisi. I don't know if that helps here in Hawaii but that has always been a possibility and it is much more a possibility today. Thoughts? Jay, I would find it inconceivable that the current governor David E. Gay would reverse his stance on LNG, his opposition to LNG is a so-called bridge fuel. I don't think he's gonna do that and I would find it inconceivable that whoever follows E. Gay and into the governor's mansion that they believe that this is something that he or she wants to see happen. Not only that, I just do not see the political will or the political buy-in to go that route. I just can't make that. I would not disagree. I think it's a real uphill in Hawaii although in other places it seems to be working. The other side of that though is very clear to me that we have to have resilience here. That right now we're not in a position where we can use the solar plus storage for a variety of reasons, mostly I guess around the efficiency of solar and the efficiency of storage. I heard within the last couple of weeks that somebody had invented, was in the process of developing a new kind of solar cell that was like twice as efficient as the existing ones. This is not on the market or near the market but this is one of those technologies that could be promising and give us solar cells that give us much more efficiency. On batteries, I haven't heard anything much but I'm sure there are similar developments in the science about batteries. So right now, I don't, on KAC is a good example of this. Right now we really don't have a what do you call it, solar plus battery system available at least at an economic cost to rely on it. And that's why the pie charts show so much oil. Furthermore, this is our lives here, this electricity. It's our economy. We can't afford to go down. We can't afford blackouts. So we have to have a resilient system. And I can see that going forward, even if we increase the pie chart by various renewables, we still have to have the oil or the resilience, it might be a pie chart which is a bigger pie if you will or a pie with more than 100% of contributing factors. We have to be able to step in and save the day if the existing technology, the front end technology doesn't work. And that's gonna last for decades, don't you think? I agree. I agree. I think we all kind of wanna go in the same direction as an argument discussion over not so much the overall direction we wanna go in, but the tactical decisions we make along the way and who's ox gets gored. And I don't know. I go back and forth between feeling kind of more optimistic and less optimistic. And right now I'm kind of in a, when I see these kind of pie charts, I think, oh man, we just have so far to go. Well, let's focus on the next step. If I ask you, Marco, what is the next step we should take to make you feel more optimistic? What would that be? More disruptors, my friend. More disruptors at key companies and agencies that are willing to be more risk-acceptant and willing to take things in arrows and just shake things up a bit rather than just kind of plod at P-O-L-D plod along. Less plodders, more disruptors. Well, I think this is a disruptive conversation. It is because I think what it suggests to me is that you and I would have followed this thread going forward. We always need to be looking for those disruptors, that leadership, for that technology, for that mindset that'll take us somewhere and hopefully it'll meet our targets. But for now, all I can do is sign off and hope that we can track on this going forward, Marco. Well, you do, you have, and you forever shall rock my world, dear Jay Fidel. Thank you, Marco. I'm so looking forward to our next discussion in two weeks. Thank you so much. Aloha.