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By Russ Finley on Mar 17, 2013 with 16 responses

Hawaii’s Electrical Potential

 Wind

Click here to see a YouTube video of these turbines in action. The sound you hear is the wind blowing.

Any visitor to the dry side of Maui (where I am presently vacationing) can’t help but notice the wind turbines. Like all energy sources, wind has its downsides. There’s now a scar gouged out of the mountainside to create an access road to them, and at night the mountain has a series of blinking lights up one side. Wind farms are notorious for messing up natural vistas.

At first glance, it didn’t seem likely to me that they will kill many birds, and I’m sure they studied the topic well, but just seconds before I hit the record button to video the turbines at close range, a large flock of seabirds flew through my view finder with the turbines in the background. What a shot that would have made. The public doesn’t have access to the base of those turbines to see if there are any dead birds lying around. Hawaii already has a very large number of endangered bird species.

While whale watching from a boat just downwind from those turbines on a day when the wind speeds were exceeding 50 mph I spent most of my time staring at the turbines instead of the whitecaps. I noticed that several were not spinning. They were probably shut down because the wind speed was too high. The next morning, several more were shut down because the wind speeds were too low.

Couple that level of intermittency with the fact that they don’t last as long as hoped for (20 or so years compared to up to 60 for nuclear), along with the new power lines that had to be installed and you can get a feel for the upfront costs associated with wind.

 Solar

Rooftop solar installations, both photovoltaic and hot water, are very common here in Maui. By some estimates, Hawaii is number two in the nation for solar installations per capita, which sounds reasonable considering that Hawaii is by far and away, number one in the nation when it comes to electricity costs. On the other hand, not all areas of Hawaii have as much sunshine as the dry side of the Maui volcano. The average Maui resident would pay about $30K to meet their power needs with solar (sans government subsidy). Compare that to a place like Seattle, which has electricity rates that are three times lower and solar installation costs are twice that of Maui.

Click here and here to see a few examples.

The solar hot water systems look older, suggesting that they’ve been popular here longer, and not being prone to freeze damage like in many other states, probably have longer life spans. Hot water solar can be up to forty percent efficient whereas photovoltaic hovers around 8-10 percent.


Our dinner host last night (who recently put solar on his home) paid about $15K (before subsidies) to replace half of his power. He later decided to replace all of his power but chose not to do so when he was told he would have to pay many thousands of dollars for a study to see if the grid could handle his extra solar and there would be no guarantee that they would allow him to have them after paying for the study. From the Maui News:

The issue appears to stem from a recent surge in photovoltaic systems, adding more renewable energy to the island’s electrical grid than Maui Electric Co. can handle. MECO officials said the interconnection studies – which can cost homeowners as much as $15,000 to $20,000 – are needed to ensure their system can be integrated into the grid without causing outages or interrupting a steady energy supply.

The Public Utilities Commission has required MECO to conduct its own review to determine whether a customer can safely connect to the grid, before requiring homeowners to pay for their own costly study.

Solar installers estimate that around 20 percent of the island’s circuits, or neighborhood electrical systems, are no longer being allowed to add any more photovoltaic systems because they have hit the maximum capacity of solar energy allowed by MECO

Wind and solar cannot do the job alone.

My wife was wondering why people pay so much to put solar on their rooftops instead of voting to pay a surcharge to have utilities install larger installations like the one shown above at a Maui community center parking lot (which would capture the economy of scale and could potentially be switched on and off by the utility to help stabilize the grid).

She made a good point. My guess is that tax payers would balk at the rate increases, which would be similar to the ones ushered in by the new Maui wind turbines, but maybe not. Citizens investing their own capital are doing their fellow citizens a favor. Considering that the average household has $16K in credit card debt, solar panels are probably not a good investment for the average American. What are some of the risks?

1)     You are likely to move and not be able to recoup your investment in selling price.

2)     Government policies may change, reducing or even eliminating subsidies.

3)     Significant grid usage fees may develop as more wind and solar go on line.

4)     You might need a new roof.

5)     System maintenance costs like cleaning and inverter replacement may be higher than expected.

6)     Your capital may have earned a higher return if invested elsewhere.

7)     Rates may drop (a cheaper way to generate electricity than liquid fueled generators may arrive), making your solar panels less likely to pay themselves off.

I like the concept of rooftop solar. It is a better investment than paying $30K for a car. You could pay $15K for a car and replace half of your power with the other $15K (in Maui, not Seattle). Solar is unique as status symbols go in that it at least has the potential to turn a profit and reduce carbon emissions. My advice would be, if you can pay cash, solar is worth investing in if you live in a sunny area and have a roof sloping the right direction because there is relatively little to lose (or gain), and when it comes to bragging rights, they are hard to beat, especially if you are powering a Nissan Leaf, which I’ve noticed are also common here on Maui.

 Biofuels

Maui has one of the last remaining sugar mills in Hawaii. Ironically, before the word biofuel was even coined, the burning of bagasse at sugar refineries once produced a significant amount of Hawaii’s electricity.

I dropped in to the sugar museum and also took a walk around the outside of the sugar refinery. There are fields of sugarcane everywhere you look. Brazil makes its ethanol from sugarcane, switching from ethanol production to sugar (food) production depending on price spreads. The Maui mill produces only sugar and molasses. The sugar industry in Hawaii hangs by a thread and is largely dependent on sugar tariffs to remain financially viable. Congress recently extended the sugar program until the end of September.

I was surprised to see a large pile of coal along with about a dozen large fuel tanks containing # 2 fuel oil at the sugar mill. I was told that they use these fuels when they run out of bagasse to burn, but that sure seemed like a lot of fuel to me.

I bring this topic up because you might think that Hawaii could make some of its own liquid fuel, considering the high cost of gasoline here and considering that by some estimates, cane ethanol has an energy return on energy invested that is roughly three times better than corn ethanol, which by government fiat, displaces roughly ten percent of our gasoline supply, including the gasoline used in Maui.

I’m not a big fan of biofuels in general because of the added pressure they put on food prices and natural ecosystems. The sugar cane fields are burned before being harvested every two years.

Hawaii makes the majority of its electricity from liquid fuel, which is inefficient considering that liquid fuels are so valuable for transport, and correspondingly more expensive than fuels like coal and natural gas typically used to make electricity. Imagine the cost of trying to displace coal or natural gas with corn ethanol.

Hawaii is also home to “the world’s first commercial utility combustion turbine power plant powered entirely with biofuel…” According to the Hawaii Electric Company, they are using biodiesel to reduce oil imports. Ironically, or maybe nonsensically, they’re using imported biodiesel to do that.

 Nuclear

Nuclear? In Hawaii? I bring this topic up because a dinner party guest had suggested that nuclear energy would never be accepted in Hawaii. Considering that there already are dozens of nuclear power plants in Pearl Harbor, I’m not so sure about that.

Conclusion

One might think that if wind and solar have a chance of reaching their maximum potential and of being cost effective without government subsidies, it is in a place like Hawaii where rates are already high, there’s plenty of wind and sun, and most power already comes from petroleum fueled generators that can quickly come on line when the wind stops or the sun quits shining.

  1. By Hugh Baker on March 18, 2013 at 3:37 am

    Aloha Russ.

    I am glad you had time to visit Hawaii. However, there are a number of factual errors in your post.

    1. The wind farm you are referring to is one of the most monitored sites in Hawaii with respect to birds, bird kills and other biological risks. I have been there and I didn’t see any dead birds laying around. In fact the owner of the site has full time biologists on site who are nurturing Nene’s (the endangered state bird) in habitat that is protected for them. As for their appearance, I guess that is a matter of personal preference. I think they look awesome compared to the alternative in Hawaii, which right now is oil. Given a choice between a ridge line with wind turbines or the risk of an oil spill all over our reefs and beaches (we are islands – oil is imported on ships), I will take the wind turbines any day. If you want to know more, contact First Wind, the owner of those turbines.

    2. With respect to solar, people putting solar on their rooftops are doing only themselves (and the solar integrators who are basically taking the generous tax credits as their windfall) – a favor. The way it works in Hawaii is that the utility gets to recover all of its fixed costs without respect to how much energy they sell. This is known as “decoupling.” Retail customers are credited for the solar power they generate at the full retail rate. So, the more solar that goes in on individual customer homes, the less kilowatt hours the utility sells – but it gets to recover the same dollars. So rates go up. What this means is that those who can afford solar put it up and save money, and those who can’t afford it, see their utility rates go up. I’m sure what you saw in Maui was all “happy happy” – you were on vacation after all – but Hawaii has a very high percentage of people who struggle to put food on their table. There are some who are literally forced to choose between food or electricity – which already costs well over 35 cents per KWH and in some places is over 40 cents per KWH. So tell those who can’t participate in the solar scheme that those who are are “doing them a favor.” It just isn’t so. (By the way, even the PUC and the Legislature are worried about this issue now).

    3. With respect to nuclear in Hawaii, Section 8, Article XI of the Hawaii State Constitution says: “No nuclear fission power plant shall be constructed or radioactive material disposed of in the State without the prior approval by a two-thirds vote in each house of the legislature.” A tall order in any state … but in Hawaii? Forget it.

    We have severe energy challenges in Hawaii – prices are high and we are 85% dependent on oil. Our best options are wind, solar and geothermal – and some think biomass. It is really going to take “all of the above” but we really need better policy and leadership to speed up the transition and to make it fair for everyone.

    Respectfully,

    Hugh Baker

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    • By Russ Finley on March 18, 2013 at 8:44 pm


      “However, there are a number of factual errors in your post.”

      What factual errors are you referring to?

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      • By science guru on March 20, 2013 at 1:02 am

        Russ,
        A few factual errors like:
        I used your bullet list with answers to reply:
        1) You are likely to move and not be able to recoup your investment in selling price.
        Answer – Statistical real estate survey fact dictates; The resale value of a home with solar power is proportional to the cost of the solar installation
        2) Government policies may change, reducing or even eliminating subsidies.
        Answer – The Federal subsidies are good until at least 2016, the State tax incentives are some of the highest in the nation (Up to $5,000.00 for residential and up to $500,000.00 for commercial)
        3) Significant grid usage fees may develop as more wind and solar go on line.
        Answer – At present any grid usage fees are strictly regulate by the utility commission. Secondly, if such rates were to develop, a battery backup and cut the tie to the grid would be cheaper than getting gouged.
        4) You might need a new roof.
        Answer – You will always need a new roof eventually (expected roof life 30 years, expected photovoltaic life 50 years); it is a simple process to temporarily remove the panels replace the roof and reinstall the panels (I have done it).
        5) System maintenance costs like cleaning and inverter replacement may be higher than expected.
        Answer – There is NO maintenance cost, no moving parts, nothing to adjust, nothing to grease, nothing to oil, just rinse twice a year with a hose. The inferior single type inverters should be avoided and choose the option of micro-inverters (25 year warranty).
        6) Your capital may have earned a higher return if invested elsewhere.
        Answer – Tell me, exactly where are you going to get an investment that pays better than ten percent return as solar does? The bank, doubtful? An IRA, doubtful? A CD, doubtful, a new car, no way.
        7) Rates may drop (a cheaper way to generate electricity than liquid fueled generators may arrive), making your solar panels less likely to pay themselves off.
        Answer – NO WAY, NOT EVER, utilities only know one thing, RAISE THE RATES, never, ever, ever, ever will they lower the rates. If they find a cheaper way to generate power they will just continue to raise rates. Case in point, the wind turbines require no fuel and the still continue to raise the rates. Hawaii has the highest rates in the nation!

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        • By Russ Finley on March 21, 2013 at 1:01 am


          “Statistical real estate survey fact dictates; The resale value of a
          home with solar power is proportional to the cost of the solar
          installation”

          I poked around on Google to get a feel for that claim. I of course avoided any solar or renewable energy site because, as a a student of human nature, I know they would skew everything to favor what they want to believe. I found this Forbes article that tells it like it is. With government subsidies you may break even. Without them, you may lose your shirt:

          http://www.forbes.com/sites/ashleaebeling/2011/08/01/how-much-do-solar-panels-boost-home-sale-prices/


          “The Federal subsidies are good until at least 2016, the State tax incentives are some of the highest in the nation (Up to $5,000.00 for residential and up to $500,000.00 for commercial)”

          2016 is three years away.


          “At present any grid usage fees are strictly regulate by the utility commission. Secondly, if such rates were to develop, a battery backup and cut the tie to the grid would be cheaper than getting gouged.”

          Grid usage fees are inevitable. Somebody has to pay for the grid. Battery backup is very unlikely to be more cost effective than paying a fair use fee to maintain a grid capable of distributing an intermittent energy source.


          “AYou will always need a new roof eventually (expected roof life 30 years, expected photovoltaic life 50 years); it is a simple process to temporarily remove the panels replace the roof and reinstall the panels (I have done it).”

          Solar panels don’t have a 50 year life. Having solar panels on a roof greatly increases the cost of replacing a roof. Few people are going to replace their own roof. Standing atop my three story roof (which has a 45 degree pitch) was a terrifying experience ; )


          “There is NO maintenance cost, no moving parts, nothing to adjust, nothing to grease, nothing to oil, just rinse twice a year with a hose. The inferior single type inverters should be avoided and choose the option of micro-inverters (25 year warranty).”

          Few people are going to wash their own solar panels. Most solar installers advise clients to expect to replace their inverter in a decade or so. Monitoring systems fail, rodents chew wires, corrosion interrupts connections and on and on.


          “Tell me, exactly where are you going to get an investment that pays better than ten percent return as solar does? The bank, doubtful? An IRA, doubtful? A CD, doubtful, a new car, no way. “

          I have had several investments that paid better than that. And to compare apples to apples, you should exclude the temporary government subsidies.


          “NO WAY, NOT EVER, utilities only know one thing, RAISE THE RATES,
          never, ever, ever, ever will they lower the rates. If they find a
          cheaper way to generate power they will just continue to raise rates.
          Case in point, the wind turbines require no fuel and the still continue
          to raise the rates. Hawaii has the highest rates in the nation!”

          The future is impossible to predict. For example, should cost competitive small modular reactor designs arrive, they may reduce the cost of energy production, increase utility profit margins and reduce consumer bills, making an investment in solar less profitable.

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          • By science guru on March 22, 2013 at 12:21 pm

            Russ,
            Very week comeback on all points!
            You said:
            “I poked around on Google to get a feel for that claim”
            I say:
            Real world experience proves better than a Google search.
            I gave you hard facts, you gave me guesses.

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          • By Clee on April 22, 2013 at 3:53 pm

            “With government subsidies you may break even. Without them, you may lose your shirt” and “Government policies may change, reducing or even eliminating subsidies”.

            Sounds like a reason to get your solar now rather than wait three years.

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  2. By ben on March 20, 2013 at 8:21 am

    You offer some sound insights here, to include some questions as to why the Aloha State hasn’t figured out practical ways to be much more energy self-sufficient with such incredibly high energy expenses. My misgivings on this point hit home long ago when visiting the islands. It was only after RR moved there to assist Merica with some renewable fuels initiatives that I came to more fully appreciate just how hard difficult it must be to get things done in an environment that seemingly mirrors that of so much of America; don’t tinker too much with arrangements that we already know and instinctively accept.

    It would seem that if biofuel numbers don’t work on these islands, they may not work (without major capital susbsidies) at all. The demonstration facility of Envergent (UOP/Ensyn) over at the Tesoro refinery in Kapolei would seem interesting. But what appears to be little more than a ho-hum out of that quarter speaks volumes to me. One could imagine how biogas might meet a slice of transport requirements where CHP microturbines help support hybrid-EV charging and CNG enjoys broader appeal.
    Thanks, Ben

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    • By Russ Finley on March 21, 2013 at 12:12 am

      Thanks for the thoughts, Ben. Hawaii does not have a lot of industry, and thanks to the mild climate negating the need for heating or cooling of buildings, Co-Heat and Power doesn’t have a lot of applications like it does in other climates.

      Hawaii is in the same boat as everyone else. They can only supplement their energy needs with wind, solar, and maybe geothermal, Adding nuclear to the mix helps but to date, humanity does not have a replacement for fossil fuels.

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  3. By James Van Damme on March 20, 2013 at 10:23 pm

    No geothermal?

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  4. By Piet van der Hoop Holland on May 5, 2013 at 6:58 am

    very strange they dont utilize Geothermal, with lots of volcanos, that should be a walk in the park in combination with solar!! But of course prices in the US are still low, I know much higher in Hawai, but in all honesty I think it will take another few decades to get the ball rolling on the alternative energy side. Also dont forget, with all the big oil/utility companies that want to ride out their investments first, logically.

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    • By Russ Finley on May 5, 2013 at 11:24 am

      Good points. I don’t know what’s up with that. I did find this link that suggests geothermal has some problems. The video is well worth watching:

      http://www.bigislandvideonews.com/2012/04/25/video-a-case-against-geothermal-part-one/

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    • By Robert Rapier on May 5, 2013 at 2:49 pm

      We do have a geothermal plant on the Big Island, but there has been some resistance to further development. A lot of reasons for that; some cultural, some just don’t like development. But I agree that looking from afar, geothermal here seems to be a no-brainer.

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  5. By Andrew Holland on June 4, 2013 at 5:33 pm

    Russ – what about OTEC (Ocean Thermal Energy Conversion)? Using the temperature differences between surface water and deep water, you can run a turbine and generate always-on clean energy. Hawaii is really the only place in the US with warm surface water and deep, cold water at an area so close to land. They’ve done a great deal of research on it out on the Big Island. Robert – do you know anything about this?

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    • By Robert Rapier on June 4, 2013 at 5:52 pm

      They have an OTEC lab out here where they have done a good bit of research. My understanding is that the capital costs are still too high for the low efficiency. Some of the resorts, though, are using deep water to help provide air conditioning. Cheaper and more efficient than OTEC.

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  6. By Tom G. on June 4, 2013 at 7:12 pm

    A good friend of mine holds some thermal heat pipe patents that show potential when applied to OTEC. Also the need for the pumping of deep cold ocean water can be mostly eliminated by increasing the temperature of the working fluid by using massive floating black bodies. CO2 technology looks best for the turbine cycle which is just now starting to come out of the labs. This is a very long and very slow process and not a whole lot of funding if being dedicated to the process.

    One reason for the lack of funding might be that the best locations for the implementation of OTEC is mostly South of the U.S. Mainland West of Mexico and in the Gulf of Mexico near Florida. Of course costs must come down but we are still at the point of doing basic research and design studies in many cases.

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