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Summary:
Study of Renewable and Unconventional Energy in Hawaii
Warren Bollmeier, et al.
The primary objectives of this study were to develop and
evaluate a working database of potential wind, solar and biomass
projects and other commercial activities for the generation
of electricity in Hawaii over the next 30 years, and to examine
possible frameworks for evaluating the resulting overall economics
impacts to the state. The key outputs were the preparation
of a strategy to phase renewables into the electric utility
grids, an evaluation of the potential for alternative public
policy options to facilitate the implementation process, and
a preliminary assessment of the overall economic impacts.
An initial working database of about 108 candidate projects
was assembled utilizing the Global Resource Assessment prepared
by the Hawaii Natural Energy Institute as the reference point.
The candidate projects were screened to determine which could
be realistically developed during the 30-year timeframe. The
screening process included evaluation of utility integration,
land use and community acceptance issues. A total of 28 projects
survived the screening process and estimates of future project
performance and costs were prepared. Future project costs
were compared with estimates of future utility market prices
for electricity. A preliminary strategy was initially developed
for phasing the projects on Hawaii’s island grids, assuming:
(1) today’s economics, government policies, and utility
and business practices (“business as usual” scenario),
and (2) implementation of the projects would be paced primarily
by market opportunities (when the market price for electricity
is sufficient to make the project financially viable for a
developer). The 30-year period was broken down into three
sub-periods: near-term (2003 to 2008), mid-term (2008 to 2018),
and far-term (2018 to 2033).
The phasing strategy included implementation of 9 projects
in the near-term and 19 in the mid-term, resulting in a statewide
renewable electricity fraction of 11.7% by 2008 and 28.6%
by 2018. Specific results for each island are also provided.
Regarding the far-term, a more qualitative approach was employed,
based on an assessment of the factors that will influence
the potential for reaching higher renewable fractions on each
of the islands. However, it was noted the phasing strategy
requires a proactive, constructive implementation of projects
under the Public Utilities Regulatory Act (PURPA), which has
not been the case for the past decade in Hawaii.
A brief analysis was conducted of two alternative public
policy options to the business-as-usual scenario: market reform
and increased incentives. The results indicated that either
approach could accelerate the implementation process by two
to five years, depending on the technology. In conjunction
with the evaluation of public policy options, a preliminary
assessment was made of the potential overall economic impacts
associated with a shift towards renewables and other distributed
generation technologies. A preliminary assessment was made
for Oahu assuming future needs over the next 20 years based
on inputs from the Hawaiian Electric Company and comparing
the impacts of meeting those needs by central generation (conventional
large powerplants) versus distributed generation (smaller
facilities located closer to loads). The preliminary results
indicate that the capacity costs of distributed generation
would be 38% higher than for central generation, but there
would be a savings of 22% in the delivered electricity costs
to the customer.
Overall, the study provides a ladder of realistic projects
and commercial activities, and a phasing strategy for implementing
them, such that Hawaii could double its renewable use in the
near-term and double it again in the mid-term. Backed by hard
data and information, the phasing strategy is a viable, valuable
input to further discussion on how to create a more renewable
future for Hawaii.
To see the full study go to the Hawaii Energy Policy Forum’s
website at:
<http://hawaiienergypolicy.hawaii.edu/papers/bollmeier.pdf>
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