Hawaiian Electric Company

Hawaii Clean Energy Initiative Building a Sustainable Hawaii

Seminar in Renewable Energy and Island SustainabilitySeptember 10, 2009

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Hawaii’s Energy Today

Dependent on imported fossil fuel, mostly oil, for 90 percent of our primary energy

• Security Challenges• Economic Challenges• Environmental Challenges

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Our TaskReduce our dependence

on imported oilHow Can We Do This?

While we maintain. . .Security

Comfort & ConvenienceMobility

And still do not want to pay more than we have to?

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Hawaii Clean Energy Initiative

What Does It Mean? • For Our Customers • For the Utility • For Hawaii

Road map to a preferred energy future

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Goals of HCEI • Achieve 70% clean energy by 2030

– 30% energy efficiency– 40% renewable energy

• Hawaii as model of clean energy economy

• Diversify supply to increase security • Economic opportunity at all levels• Foster innovation in technology, finance,

organization & policy • Create clean energy economy workforce

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HECO Energy Efficiency• Energy$olutions for Home & for Business • 13 years -- $97 million in rebates/incentives• Over $500 million savings for customers• Reduced demand = 169 MW • Oil use avoided = 1.6 million barrels/year • CO2 emissions avoided = 864 m tons/year• Highlights:

  •   > 1.8 million CFL bulbs   •   > 50,000 solar water heaters   •   > 39,000 Energy Star® appliance rebates

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Hawaii Energy Efficiency Program• July 1, 2009 taken over by (Science

Applications International Corporation) • Fortune 500® scientific, engineering &

technology company• 45,000 employees; 400 in Hawaii• Customers:Department of Defense, 

intelligence, Department of Homeland Security, select commercial markets

• Annual revenues $10.1 B in FY 2008

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Hawaii Energy Efficiency Program

• Energy efficiency & renewable energy

• Funded by utility rate payers• Financial incentives, market

outreach, education, behavior change

All market sectors:– Residential – Commercial– Industrial– Government

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Load Control

• Hawaiian Electric continues Energy Scout Load Control Program– 39,000 residential customers– 44 commercial customers

• Providing 52 MW peak interruptible load

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In Your Home or Business

• Smart Meters • More Solar Water Heating & PV

– SolarSaver (pay as you save)– PV Host (rent your roof)– Net energy metering (NEM)

• More Energy Efficiency (EE) – EE portfolio standard– Continued promotions & rebates

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For the Utility

• New model for business and regulation • Focus on service and efficiency, not

sales• Opportunities

– Retire least efficient oil-fired units – Upgrade to smart grid for 21st century

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• Utility committed to aggressive new RE goals by 2030– 1,100 MW of new RE energy– 40 percent/2030 RPS

• Pledge to smooth purchase power agreement process

• Feed-in Tariff (FIT) to make it easier to develop & sell renewable energy to utilities

RE Developers & Energy Business

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For Hawaii• Greater energy security• Reduced GHG emissions• More money stays home creating

economic opportunities & jobs:− Undersea

cable− Wind farms− Solar

installations − Agricultural

energy − New RE plant

construction

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How Can We Do It?

• Large & mid-size wind projects• Biofuels

–Waste-to-energy–Biomass; land crops & algae for liquid fuels

• Solar power–Customer sited

& utility scale

…more

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How Can We Do It?

• Geothermal• Ocean power

– Seawater A/C– Wave Energy– OTEC

• Next big thing?

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‘Interisland Wind’

• Wind farms on Lanai & MolokaiCastle & Cooke &

First Wind Hawaii each agree to initial 200 MW projects

• Hawaiian Electric planning facilities & operations to integrate 400 MW of wind power on Oahu •State of Hawaii to plan, permit & contract building of inter-island cable

Similar submarine cables in service (Cross Island Cable, many others)

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Transportation solutions

Initiatives must include:– mass transit – all modes– more fuel-efficient vehicles– cleaner alternative fuels– more personal mobility (walk,

bike)

• Rapid adoption ofPlug-in Electric Vehicles

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Electrifying transportation• 1/3 of imported oil in Hawaii used for ground

transportation• Driving an electric vehicle (hybrid or plug-in)

is cheaper (≈1/3 cost) and cleaner (less CO2) than internal combustion engine vehicle

• Hawaiian Electric working – Better Place; Phoenix Motorcars; Idaho National

Laboratory (hybrid conversion to plug-in hybrid) for HECO and MECO; other EV and equipment manufacturers

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Your Bill

• Advanced metering to give you more control

• Time-of-use rates for off-peak savings • Greater savings:

– Solar, energy efficiency & conservation

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Bottom Line

• Bills more predictable than with oil • Total energy cost (electricity &

transportation) lower using RE in place of oil & gasoline

• Hawaii becomes national leader– Increasing energy independence– Reducing fossil-fuel use– Limiting greenhouse gases

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Opportunity to Lead• Island people under- stand sense of

limits• Island people have strong

environmental empathy • Hawaii has trade winds, strong

sunlight, other RE resources

• Hawaii can model a low-carbon and totally modern lifestyle

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What We Need

• Leadership• Laying down our arms• Sense of urgency• Speaking the truth

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Two Simple Words

• LESS– Energy efficiency, conservation, wise use of

resources

• LOCAL– Use our local resources, all of which are

renewable and have lower carbon emissions than using coal and oil for 90 percent of our energy

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•Hawaii’s Energy Future www.hawaiisenergyfuture.com

•Hawaiian Electric Companywww.heco.com

•Hawaii Clean Energy Initiative www.hawaiicleanenergyinitiative.org

Learn More

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Learn More – cont.

•Hawaii energy data http://hawaii.gov/dbedt/info/energy

•Interisland Wind Project www.interislandwind.com

•Hawaii Energy Efficiency Program www.hawaiienergy.com

•Better Place www.betterplace.com

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Hawaiian Electric Company

Basics

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Who is HECO?

• Locally owned and operated• Regulated by government• 400,000 customers (Oahu, Maui County, Hawaii)

• 2,000 employees (HECO, MECO, HELCO)

– 1,200 IBEW union members– 800 non-union

• 19,000 Hawaii shareholders• Over $2 billion in assets• Over $169 million in taxes a year (federal/state)

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Who uses electricity?• 295,000 residential customers:

2 million Megawatt hours/year

• 33,000 commercial/ government/ military customers: 5.5 million MWh/year

• Military alone:1.2 million MWh/year (15.4% of electricity on Oahu)

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HonoluluEnergy Source: OilFirm Generation: 113 MW

AES - HawaiiEnergy Source: CoalFirm Generation: 180 MW

Kalaeloa PartnersEnergy Source: OilFirm Generation: 180 MW

Electricity generation on Oahu

WaiauEnergy Source: OilFirm Generation: 499 MW

KaheEnergy Source: OilFirm Generation: 651 MW

H-PowerEnergy Source: Municipal Solid WasteFirm Generation: 46 MW

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Hawaiian Electric system

Generation(Power plants)

Trans-missionLines

Trans-missionSub-stations

Sub Trans-missionLines

DistributionSubstation

Distribution & Service

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Growing electricity use 1970 - 2005

PopulationGrowth

GSP Growth

Electricity/per capitaGrowth

75%

139%161%

Source: DBEDT Energy Resources Coordinator’s 2006 Annual Report

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Daily peak drives planning

Daily demand peak

usually from 5 to 9 pm, determines how much electric generation is needed

Baseload: 24/7

Cycling

Peak load

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Our dependence on oilWe depend on imported fossil fuel (mostly oil, some coal) for over 90% of all energy – jet fuel, synthetic natural gas, gasoline, and electricity

Oil has challenges:– Security of supply– High cost

– HECO’s oil price up171% from 1996 to 2006

– Environmental impact – Clean air – Clean water– Global warming  

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49% of imported crudeoil is from Middle East or Islamic countries

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Refining oil

• Light, quality products first

• Diesel• Gasoline• Residuals

(bunker and LSFO)

Star-Bulletin graphic

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Oil is refined for many uses

Each barrel is refinedfirst for jet fuel, then gasand marine fuel.

What’s left, the goopcalled “residual,” is usedto create electricity.

An “integrated” energy system

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Two myths about renewable energy

• “There is a ‘Silver Bullet.’”‘OTEC is all we need.’ ‘One big solar farm could power all Oahu.’‘Nuclear energy is the answer.’

• “Wind, sun are free; RE should cost less than fossil fuel energy.”At first no. In the long run, as oil gets more expensive, RE prices should be more stable -- and probably cheaper.

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Energy Storage

The greatest technological challenge to achieving the Hawaii Clean Energy Initiative may be finding a way to store utility volumes of renewable

electricity and move it from when it is made to when it is needed.

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Pumped-storage hydro

• Pump water to upper reservoir during non-peak period (overnight)

• Hydro-electric operation during peak demand period

• Overall efficiency about 70%

• Turns irregular ‘as available’ renewable energy into firm energy for peak periods

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Biofuels

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Biodiesel

• Higher energy yield than

ethanol

• Made from vegetable or animal oil: palm, jatropha, soybeans, peanuts, canola, kukui, coconut -- ALGAE

• Feed stock can be imported or grown locally

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Miscellaneous

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Greening our existing assets

• New Unit at Campbell Industrial Park– 110 MW peaking unit -- 2009– RFP for 100% biofuel supply

• Longer-Term Initiatives– Studying biofuels for steam boilers– Planning algae for biodiesel feed stock

demonstration using power plant CO2

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Thank youpeter.rosegg@heco.com

808-543-7780