SUBHEAD: Hawaii's challenges stall wind energy source’s unlimited potential.
By Sophie Cocke on 20 September 2010 in Pacific Business News -
(http://pacific.bizjournals.com/pacific/stories/2010/09/20/story2.html?b=1284955200%5E3963521)
By Sophie Cocke on 20 September 2010 in Pacific Business News -
(http://pacific.bizjournals.com/pacific/stories/2010/09/20/story2.html?b=1284955200%5E3963521)
Image above: Abandoned windmills at South Point on the Big Island. From (http://www.geo.cornell.edu/geology/classes/hawaii/photos/photos_2001.html).
A 100-kilowatt wind turbine will soon hover atop a 120-foot-high tower owned by the Hawaii Water Service Co. on the Big Island. Or, at least that is what’s planned.
But so far the process for the single wind turbine in Waikoloa has been far from easy. Hawaii County zoning ordinances require a use permit, which took six months to secure, planning department approval, which is ongoing, and a building permit, which is expected to take another four to six months.
“There needs to be more certainty on the county levels to streamline wind energy permits, and clarity on exactly where and what kind of wind system uses each county wants to permit.” said Leo Caires, president of Gen-X Energy Development in Haiku, Maui, which is partnering with Boulder, Colo.-based NexGen Energy Partners for the project’s financing. “Technology can be deployed only as fast as local policies are developed.”
This story’s look at wind energy and its role in Hawaii’s push for energy independence is the third in an occasional series designed to analyze the status of our state’s alternative-energy options, where the best opportunities lie and what’s needed to overcome myriad obstacles.
There are currently four operational wind farms on Maui and the Big Island, and four more in various stages of development. Currently, about 9 percent of Maui’s energy comes from wind and about 12 percent of the Big Island’s supply.
First Wind is planning to expand the 30 megawatt Kaheawa Power Project on West Maui by 21 megawatts, and San Diego-based Sempra Generation hopes to begin a 22-megawatt wind farm at Ulupalakua Ranch in upcountry Maui.
The Kauai Electric Utility Cooperative has signed an agreement with UPC Kauai Wind Power for a 10.5-megawatt to 15-megawatt project, and Oahu has its own plans for wind on the North Shore. Boston-based First Wind has broken ground on a 30-megawatt project in Kahuku, but the biggest plans for powering Hawaii’s most populous island with wind energy are intended for Molokai and Lanai.
Wind technology has come a long way since the first-generation wind turbines of the 1980s, and even on a small scale the energy delivered can rival the price of oil if turbines are constructed under favorable wind conditions. Small wind turbines can range from $3,000 to $5,000 per kilowatt capacity, with commercial turbines reaching more than $2 million, according to Windindustry, a nonprofit industry group.
But the permitting process has strangled businesses hoping to take advantage of Hawaii’s abundant wind resources.
“It’s a very tough hurdle to get small wind going,” said Nick Dizon of Honolulu Nidon Clean Energy, a renewable-energy design and engineering company that has been working with state and county government agencies to improve the process. “If that’s all we did, we’d be broke.”
Part of the draw of so-called “small wind” — as opposed to large-scale wind farms whose primary function is to sell capacity to utility companies — is that it can work in sync with agriculture. Farmers can get paid for selling energy from wind turbines installed on their land back to utility companies, and the process doesn’t disrupt farming practices. But difficulties with permitting remain an obstacle.
“I have farmers on Maui who tomorrow would sign a contract, but if we have to do all the land-use permitting — and investors don’t want to wait for every approval — it can seem like a very long task to do,” said Caires.
Once approved, it takes only one to three days to put up a wind turbine.
County-level proposals are currently under review for expediting the process, including an initiative on Maui that will help extend wind energy to residential areas. An unknown number of off-grid and grid-tied wind turbines power homes and businesses, particularly in remote rural regions of Hawaii, and the state Department of Transportation has installed 16 small-scale wind turbines to power its airfield along Lagoon Drive on Oahu.
As small wind struggles to get a foothold, large utility-scale projects are lumbering ahead.
In addition to their own permitting processes, big wind must also contend with the Public Utility Commission’s competitive bidding process. Implemented two years ago, the requirement pertains to projects of more than 5 megawatts on Oahu and 2.7 megawatts on Maui and the Big Island. While well-intentioned, the process has bogged down energy projects.
“It’s a three- to four-year process to get a project moving before you can even start putting a spade in the ground,” said Karl Stahlkopf, a partner at Kairos Energy Capital, a Honolulu merchant bank specializing in renewable-energy projects. Formerly, project developers could engage in bilateral negotiations with Hawaiian Electric.
The process can be a drain on investment.
“That’s got to go away,” said Stahlkopf of the bidding requirement. “Because if it doesn’t, we’re going to end up with either a lot of sub-optimal size projects — very small — or end up with no projects at all because of the difficulties in getting through all the hoops to get projects done. Capital is going to redeploy itself to places where it can be deployed quicker, more efficiently, and with appropriate rates of return having to deal with the risk.”
Despite the laborious permitting, bidding and approval procedures, Hawaii remains an attractive investment because of its high average wind speeds, the state’s aggressive clean-energy policy and high electricity prices, which can be as high as 38 cents per kilowatt hour for businesses in some parts of the state.
The state Department of Business, Economic Development and Tourism, and utilities, are moving aggressively to integrate utility-scale wind farms into Hawaii’s energy mix.
Oahu lacks the abundant wind of other islands, but has by far the highest energy needs. In concert with Castle & Cooke and First Wind, Hawaiian Electric hopes to lay a $1 billion cable between Oahu and two neighbor islands that will pull 400 megawatts from proposed wind farms on Molokai and Lanai. If successful, the wind energy could provide 20 percent of Oahu’s annual energy needs.
But so far the process for the single wind turbine in Waikoloa has been far from easy. Hawaii County zoning ordinances require a use permit, which took six months to secure, planning department approval, which is ongoing, and a building permit, which is expected to take another four to six months.
“There needs to be more certainty on the county levels to streamline wind energy permits, and clarity on exactly where and what kind of wind system uses each county wants to permit.” said Leo Caires, president of Gen-X Energy Development in Haiku, Maui, which is partnering with Boulder, Colo.-based NexGen Energy Partners for the project’s financing. “Technology can be deployed only as fast as local policies are developed.”
This story’s look at wind energy and its role in Hawaii’s push for energy independence is the third in an occasional series designed to analyze the status of our state’s alternative-energy options, where the best opportunities lie and what’s needed to overcome myriad obstacles.
There are currently four operational wind farms on Maui and the Big Island, and four more in various stages of development. Currently, about 9 percent of Maui’s energy comes from wind and about 12 percent of the Big Island’s supply.
First Wind is planning to expand the 30 megawatt Kaheawa Power Project on West Maui by 21 megawatts, and San Diego-based Sempra Generation hopes to begin a 22-megawatt wind farm at Ulupalakua Ranch in upcountry Maui.
The Kauai Electric Utility Cooperative has signed an agreement with UPC Kauai Wind Power for a 10.5-megawatt to 15-megawatt project, and Oahu has its own plans for wind on the North Shore. Boston-based First Wind has broken ground on a 30-megawatt project in Kahuku, but the biggest plans for powering Hawaii’s most populous island with wind energy are intended for Molokai and Lanai.
Wind technology has come a long way since the first-generation wind turbines of the 1980s, and even on a small scale the energy delivered can rival the price of oil if turbines are constructed under favorable wind conditions. Small wind turbines can range from $3,000 to $5,000 per kilowatt capacity, with commercial turbines reaching more than $2 million, according to Windindustry, a nonprofit industry group.
But the permitting process has strangled businesses hoping to take advantage of Hawaii’s abundant wind resources.
“It’s a very tough hurdle to get small wind going,” said Nick Dizon of Honolulu Nidon Clean Energy, a renewable-energy design and engineering company that has been working with state and county government agencies to improve the process. “If that’s all we did, we’d be broke.”
Part of the draw of so-called “small wind” — as opposed to large-scale wind farms whose primary function is to sell capacity to utility companies — is that it can work in sync with agriculture. Farmers can get paid for selling energy from wind turbines installed on their land back to utility companies, and the process doesn’t disrupt farming practices. But difficulties with permitting remain an obstacle.
“I have farmers on Maui who tomorrow would sign a contract, but if we have to do all the land-use permitting — and investors don’t want to wait for every approval — it can seem like a very long task to do,” said Caires.
Once approved, it takes only one to three days to put up a wind turbine.
County-level proposals are currently under review for expediting the process, including an initiative on Maui that will help extend wind energy to residential areas. An unknown number of off-grid and grid-tied wind turbines power homes and businesses, particularly in remote rural regions of Hawaii, and the state Department of Transportation has installed 16 small-scale wind turbines to power its airfield along Lagoon Drive on Oahu.
As small wind struggles to get a foothold, large utility-scale projects are lumbering ahead.
In addition to their own permitting processes, big wind must also contend with the Public Utility Commission’s competitive bidding process. Implemented two years ago, the requirement pertains to projects of more than 5 megawatts on Oahu and 2.7 megawatts on Maui and the Big Island. While well-intentioned, the process has bogged down energy projects.
“It’s a three- to four-year process to get a project moving before you can even start putting a spade in the ground,” said Karl Stahlkopf, a partner at Kairos Energy Capital, a Honolulu merchant bank specializing in renewable-energy projects. Formerly, project developers could engage in bilateral negotiations with Hawaiian Electric.
The process can be a drain on investment.
“That’s got to go away,” said Stahlkopf of the bidding requirement. “Because if it doesn’t, we’re going to end up with either a lot of sub-optimal size projects — very small — or end up with no projects at all because of the difficulties in getting through all the hoops to get projects done. Capital is going to redeploy itself to places where it can be deployed quicker, more efficiently, and with appropriate rates of return having to deal with the risk.”
Despite the laborious permitting, bidding and approval procedures, Hawaii remains an attractive investment because of its high average wind speeds, the state’s aggressive clean-energy policy and high electricity prices, which can be as high as 38 cents per kilowatt hour for businesses in some parts of the state.
The state Department of Business, Economic Development and Tourism, and utilities, are moving aggressively to integrate utility-scale wind farms into Hawaii’s energy mix.
Oahu lacks the abundant wind of other islands, but has by far the highest energy needs. In concert with Castle & Cooke and First Wind, Hawaiian Electric hopes to lay a $1 billion cable between Oahu and two neighbor islands that will pull 400 megawatts from proposed wind farms on Molokai and Lanai. If successful, the wind energy could provide 20 percent of Oahu’s annual energy needs.
The cost of the project could total roughly $3 billion, according to Ted Peck, the state’s energy administrator. Required grid upgrades would be financed by Hawaiian Electric, and the state would be responsible for finding financing for the undersea cable. The wind farm developers would be responsible for financing their operations.
“But $6 billion is the cost of the petroleum for the next 20 years that will be displaced by these wind farms,” Peck said.
Permits for the project still need to be secured, but perhaps the largest obstacle lies in the location of the wind farms. Neither the electric grids of Lanai or Molokai can tolerate the high penetration of energy, meaning the residents of the islands will have to bear the effects of roughly 100 to 175 wind turbines blanketing their islands without reaping the benefits. On Lanai, the wind farms could cover a fourth of the island and disrupt the hunting and fishing practices of a highly sustainable population, as well as disturb cultural and archeological sites.
“It’s tough to get an appreciation of how this will affect our island,” said Butch Gima of Lanaians for Sensible Growth, a community advocacy organization. “Even residents have a hard time conceptualizing it. When we presented a 3-D model, people were just flabbergasted. People on Oahu need to understand that out-of-sight, out-of-mind does not relieve them of the responsibility to address this issue.”
“But $6 billion is the cost of the petroleum for the next 20 years that will be displaced by these wind farms,” Peck said.
Permits for the project still need to be secured, but perhaps the largest obstacle lies in the location of the wind farms. Neither the electric grids of Lanai or Molokai can tolerate the high penetration of energy, meaning the residents of the islands will have to bear the effects of roughly 100 to 175 wind turbines blanketing their islands without reaping the benefits. On Lanai, the wind farms could cover a fourth of the island and disrupt the hunting and fishing practices of a highly sustainable population, as well as disturb cultural and archeological sites.
“It’s tough to get an appreciation of how this will affect our island,” said Butch Gima of Lanaians for Sensible Growth, a community advocacy organization. “Even residents have a hard time conceptualizing it. When we presented a 3-D model, people were just flabbergasted. People on Oahu need to understand that out-of-sight, out-of-mind does not relieve them of the responsibility to address this issue.”
Hawaiian Electric, which has been meeting regularly with residents of the islands, acknowledges the burden of the projects and the need to give something back in return, but what this would amount to remains unclear.
While major efforts are under way to secure the project, Peck said it wasn’t a done deal.
“We know that there are community concerns, and it’s critical that they are addressed,” said Peck. “The environmental impact statement is going to do a robust analysis of alternatives, and we are looking at everything to get us to a clean-energy future and get us off this drug called oil that is so dangerous to our communities.”
While Hawaii’s islands may not be dotted with wind turbines overnight, rising oil costs, national security concerns and an aggressive commitment by the state and utility companies to switch to alternatives nearly ensures that wind will play an increasing role in the state’s energy future. Though like the intermittent nature of the wind itself, the process may not always be smooth.
Current and proposed wind projects, by island, project and company
Big Island • Pakini Nui Wind Farm Apollo Energy Corp.: 20.5 mw online • Hawi Wind Farm Hawi Renewable Development: 10.5 mw online - Lalamilo Wells Wind Farm Hawaii Electric Light Co.: 1.2 mw online
Maui • Kaheawa Power Project First-Wind: 30 mw online, A 27 mw expansion is proposed • Auwahi Wind Project Sempra Generation: 40 mw
Lanai • Lanai Wind Farm Castle & Cooke: 200 mw proposed Molokai Molokai Wind Farm First Wind: 200 mw proposed
Oahu • Kahuku Wind Farm First Wind: 30 mw proposed
Kauai • Kauai Electric UPC Kauai Wind Power: 10.5 – 15 mw proposed
While major efforts are under way to secure the project, Peck said it wasn’t a done deal.
“We know that there are community concerns, and it’s critical that they are addressed,” said Peck. “The environmental impact statement is going to do a robust analysis of alternatives, and we are looking at everything to get us to a clean-energy future and get us off this drug called oil that is so dangerous to our communities.”
While Hawaii’s islands may not be dotted with wind turbines overnight, rising oil costs, national security concerns and an aggressive commitment by the state and utility companies to switch to alternatives nearly ensures that wind will play an increasing role in the state’s energy future. Though like the intermittent nature of the wind itself, the process may not always be smooth.
Current and proposed wind projects, by island, project and company
Big Island • Pakini Nui Wind Farm Apollo Energy Corp.: 20.5 mw online • Hawi Wind Farm Hawi Renewable Development: 10.5 mw online - Lalamilo Wells Wind Farm Hawaii Electric Light Co.: 1.2 mw online
Maui • Kaheawa Power Project First-Wind: 30 mw online, A 27 mw expansion is proposed • Auwahi Wind Project Sempra Generation: 40 mw
Lanai • Lanai Wind Farm Castle & Cooke: 200 mw proposed Molokai Molokai Wind Farm First Wind: 200 mw proposed
Oahu • Kahuku Wind Farm First Wind: 30 mw proposed
Kauai • Kauai Electric UPC Kauai Wind Power: 10.5 – 15 mw proposed
No comments :
Post a Comment