Hawaii's Energy Future

Renewable

Energy Sources

Biofuels

LATEST DEVELOPMENTS:

> The biofuel industry in Hawaii gets a boost as the Hawaii PUC has approved a 3-year contract allowing Maui-based Pacific Biodiesel to supply locally produced biodiesel to Hawaiian Electric Company for the Honolulu International Airport Emergency Power Facility, 12/19/12.

>Hawaii Electric Light Company is seeking approval from the Hawaii PUC on a new contract for Aina Koa Pono to supply 16 million gallons of local biofuel for the utility’s Keahole Power Plant, 8/3/12.

> The Hawaii Public Utilities Commission has given approval to Hawaiian Electric for the third biodiesel contract with Renewable Energy Group, 5/23/12.

Go to 2011 Developments

Biodiesel

What’s happening on Oahu

What’s happening on Maui

The Future of Biodiesel

Biodiesel from Algae

Ethanol

Environmental impact of biofuels

Biofuel is broadly defined as solid, liquid, or gas fuel made from recently living biological matter. It is distinguished from fossil fuel derived from long-dead biological matter that has been converted to a fuel-like oil or coal by underground pressure for millions of years.

Many plant materials and some animal products can be used to manufacture biofuel. Biofuels are used globally, most commonly to power vehicles and cooking stoves. Biofuel can be processed into biodiesel or ethanol for transportation and to generate electricity. Some biofuels can be used be used in a crude form, alone or blended with other fuels.

In 2010, Hawaiian Electric plans to begin testing crude biofuel blended with low sulfur fuel oil in conventional oil-fired steam generators. The goal is to learn how large a percentage of biofuel can be used while maintaining the efficiency of the generator and avoiding operational or repair problems. The results of this testing will determine whether biofuel blends can be used in steam units on Oahu and the Neighbor Islands.

Biodiesel

Biodiesel is a renewable fuel made by a chemical reaction of a catalyst such as methanol (alcohol) with a feedstock such as vegetable or animal oils, fats and greases. Biodiesel can be used in any diesel engine in pure form or blended with petroleum diesel at any level, usually without modification of the engine.

A Maui-based firm, Pacific Biodiesel, produces biodiesel from waste restaurant oils in Hawaii and on the Mainland from other feed stocks, including from soybeans in Texas through a partnership with singer Willie Nelson. Most of this biodiesel is used to power diesel vehicles.

On Oahu, Maui, Molokai, Lanai and Hawaii Island, biodiesel can be used in place of petroleum diesel to generate electricity in existing power plants, reducing Hawaii’s need to import fossil fuels. The Hawaiian Electric companies are seeking long-term contracts for biodiesel made from feedstocks grown and processed in Hawaii.

Biodiesel is already used in the diesel truck fleets at Hawaiian Electric, Maui Electric and Hawaii Electric Light companies and in two of Maui Electric Company’s generating units during start-up and shut-down operations.

Oahu

In late 2009, Hawaiian Electric completed the new Campbell Industrial Park Generating Station, a 110-megawatt generator designed to be fueled exclusively with 100 percent, renewable biodiesel. In approving Hawaiian Electric’s application to build the first new major generation capacity on Oahu in nearly 20 years, the Public Utilities Commission confirmed an agreement reached between the utility and the Hawaii Consumer Advocate that the unit use only biofuel.

In October 2009, Hawaiian Electric selected Iowa-based Renewable Energy Group (REG) to provide biodiesel processed from animal wastes and yellow grease for operational testing and to collect additional emissions data for the new unit. Pending approval by the Public Utilities Commission, REG has also been selected for a two-year contract to supply three to seven million gallons annually of the same biodiesel for the unit.

Hawaiian Electric’s preference is biofuel from locally-grown and processed crops. The goal is to encourage an agricultural energy industry in Hawaii to protect and green open space, revive agriculture for food and fuel, create jobs and keep more of Hawaii’s energy dollars at home – in addition to reducing our use of imported fossil fuel. Until a local agricultural energy industry is established, it will be necessary to import biofuel.

In April 2010, Hawaiian Electric companies began a formal quest for a long-term supply of biofuels made from feedstocks produced and processed within the state of Hawaii to be used for generation sites on Oahu, Maui, Molokai, Lanai and Hawaii Island. The proposals may use land or water-based crops, waste animal fat or yellow grease feedstocks originating in Hawaii that may be converted to liquid biofuel. Each growing, production and processing method for supplying biofuels to Hawaiian Electric companies must meet all environmental standards and other requirements under federal, state and county laws.

Any company chosen to supply biofuel to Hawaiian Electric and its subsidiaries must supply environmentally sustainable biofuel. In August, 2007, the "Environmental Policy for Procurement of Biodiesel from Palm Oil and Locally-Grown Feedstocks,” was developed by Hawaiian Electric and the Natural Resources Defense Council, a highly respected environmental action organization. The policy was developed because of concerns that some biofuel feedstocks are being grown in parts of the world without regard to environmental damage and human-rights violations. With the issue of its local biofuel RFP, Hawaiian Electric conferred with the NRDC to request that suppliers comply with the Roundtable for Sustainable Biofuels principles and criteria for feedstock other than palm oil.

To view the HECO-NRDC Policy progress report, click here. To view the policy implementation report, click here.

Maui

Maui Electric Company already uses biodiesel in starting up and shutting down two of its diesel generators.

On Maui, the HC&S plantation already burns biomass, known as sugar cane bagasse, for energy on the plantation and for sale to Maui Electric Company.

HC&S is seeking to ramp up its renewable energy production in a partnership with the University of Hawaii and federal government.

Federal agencies are investing up to $12 million for biofuel research at HC&S, which is a division of Alexander & Baldwin (NYSE: ALEX).

The Office of Naval Research is giving $2 million for five years for complementary crop and technology assessments. In a separate project, the Department of Energy is providing at least $2 million for UH research at HC&S.

Alexander & Baldwin's sugar plantation on Maui produces seven percent of the island’s total energy and 35 percent of its renewable energy, according to Maui Electric Company.

The projects could be impacted by decisions on water use for HC&S by the state Commission on Water Resource Management. HC&S’ use of water for irrigation has been challenged by groups such as the Native Hawaiian Legal Corporation, Earthjustice environmental law firm and the Office of Hawaiian Affairs.

The Future of Biodiesel

Experiments are underway at the Hawaii Agricultural Research Center (formerly the Hawaii Sugar Planters Association Research Center), at the University of Hawaii at Manoa College of Tropical Agriculture and Human Resources and at the University of Hawaii at Hilo College of Agriculture, Forestry and Natural Resource Management to determine which biodiesel feedstocks would be best to grow in Hawaii and under what conditions. Hawaiian Electric Company provides some of the financial support for this research.

Among the products that have been studied are jatropha, moringa, soy beans, local palm and kukui nuts. Jatropha Curcas, sometimes called the physic nut, is native to Central America but grows in many tropical and subtropical areas. The hardy jatropha is resistant to drought and pests, grows well on marginal lands and produces seeds containing up to 40 percent oil.

In July 2006, Grove Farm Co., Maui Land & Pineapple Co. and Kamehameha Schools, some of the state’s largest landowners, announced the formation of Hawai'i BioEnergy, LLC to research the viability of a large-scale biofuels industry in Hawaii.

Biodiesel from Algae

Algae – which grows rapidly and can be cultivated in ponds of seawater – is a viable feedstock for biofuels and minimizes the use of fertile land and fresh water.

Maui Electric has explored preliminary design of an exhaust gas system at its Ma’alaea Power Plant. The CO₂ from the stack gas could potentially be utilized for a third party algae project, with remuneration pursuant to an agreement. To learn more about algae, click here.

Ethanol

Ethanol – a clear, colorless grain alcohol – is also a renewable biofuel made from plant sugars. Sugar cane and sorghum are among the best feedstocks for ethanol. In the U.S., most ethanol is currently produced in corn-growing states. About 90 percent of the ethanol in the United States is mixed with gasoline at blends of 10 to 85 percent. Ethanol is already used in Hawaii due to a 2006 State mandate requiring that 85 percent of all gasoline sold must contain at least 10 percent ethanol, also known as E10. Most engines can use E10 without modification.

While there are concerns about the environmental impacts of using a valuable food crop like corn to produce energy, studies are underway on a technique called cellulosic ethanol.

Cellulosic ethanol is a type of biofuel produced from lignocelluloses, the material that comprises much of the mass of plants. Dried corn stalks and leaves, switchgrass, and wood chips are some of the more popular cellulosic materials for ethanol production. Switchgrass is the major biomass material being studied today, due to its high levels of cellulose. If successful, research into creating cellulosic ethanol could lead to a way to produce a valuable biofuel without using food crops or land best devoted to food production.

How is Ethanol Made? – U.S. Department of Energy

Environmental impact of biofuels

Two recent studies have noted a potential negative greenhouse gas impact of certain biofuels, depending on which crops are used and how they are procured. The studies clearly make the point that there are right ways and wrong ways to pursue biofuels.

The studies primarily discuss ethanol, and in particular ethanol from corn and other food products, and note that when these crops are grown on lands converted from rainforests and other previously undisturbed ecosystems, the result can be the release of more CO2, a "carbon debt" that must be paid down over time before the value of lower CO2 from using biofuels instead of fossil fuels can result in a net CO2 benefit.

Here in Hawaii, the Hawaiian Electric utilities are currently seeking to use biodiesel – a very different biofuel from ethanol – and the goal is to use as much as possible from feedstocks that are grown in Hawaii on agricultural land that is now fallow.

As a transition to that time, while there will be a need to import biodiesel or its feedstocks, those imports must comply with the very strict sustainable sourcing requirements developed by Hawaiian Electric in partnership with the Natural Resources Defense Council – one of the most respected environmental groups in the country.

In the long run, the potential of sustainable feedstocks like algae, which feeds on carbon dioxide, offers the promise of a “next generation” biodiesel that does not impact any agricultural lands. This algae-based biodiesel could supplement feedstocks grown in Hawaii by local farmers.

2011 Developments

> Renewable Energy Group (REG) has again been selected by Hawaiian Electric to supply sustainable biodiesel for the utility's Campbell Industrial Park generating station, extending the current supply contract for an additional three years, 10/31/11.

> Hawaiian Electric Company has reached an agreement with Phycal, Inc. for a supply of biofuel derived from algae for testing at Kahe Generating Station, 9/29/11.

> Construction starts in October 2011 on a new emergency power facility at Honolulu International Airport that will be powered by renewable biodiesel, officials of the State Department of Transportation said in an announcement today, 9/22/11.

> Subject to PUC approval, Hawaii BioEnergy has become the third company to enter a 20-year contract with Hawaiian Electric Company to supply local, sustainable biofuel from energy crops grown on Kauai, 9/12/11.

> Pacific Biodiesel will supply 250,000 gallons of locally produced biodiesel to the new Honolulu International Airport Emergency Power Facility under a biofuel supply agreement reached this month with Hawaiian Electric Company. The contract is subject to approval by the Hawaii Public Utilities Commission with input from the Consumer Advocate, and will commence when the airport facility is completed sometime in October 2012.

> A request for proposals has been issued by Hawaiian Electric as the company seeks to find a supplier of sustainably produced, renewable biofuel for the Kahe Power Plant, 4/29/11.

> Hawaiian Electric has issued a call for suppliers of biodiesel to fuel the Campbell Industrial Park generating station and an emergency generator at the Honolulu International Airport. The deadline to submit proposals is March 15, 2011 with the final agreement subject to approval by the Hawaii PUC, 2/1/2011

> In cooperation with the Electric Power Research Institute, Hawaiian Electric has been testing biofuels at the Kahe Power Plant in Leeward Oahu. The company announced it has successfully used 100 percent renewable biofuel to fire a petroleum oil-fired steam turbine generator. Read here for full details, 1/28/11