08.02.13

Hawaiian Electric Company’s Integrated Resource Plan – Welcome to Fantasy Island!

Posted in Uncategorized at 5:59 am by Administrator

On June 28, 2013 the Hawaiian Electric Company (HECO) released its Integrated Resource Plan (IRP) which outlines how it will meet electricity demand over the next five years and how it will achieve the Renewable Portfolio Standards (RPS) which require that 25% of generation be from renewables by 2020 and 40% by 2030.

This 775 page document consists of hundreds of graphs and tables from different runs of a computer modeling tool called the “Strategist”.  There are also some very superficial statements about the potential for Demand Response, conservation, integration of more renewable generation and inter-island cable connections.

When I see computer model scenarios with names like “Blazing a Bold Frontier”, “Stuck in the Middle”, “No Burning Desire”, and “Moved By Passion” I immediately think back to a consulting engagement in the oil patch that I was part of many years ago.  After our initial meeting with the client, which involved about 15 people for the whole day, our sales guy was ecstatic because we had accomplished two things; we agreed upon a name for the engagement (which he had proposed to the group in the first 5 minutes of the meeting) and we agreed upon a two sentence mission statement.  I thought it was a ludicrous waste of everyone’s time but I was wrong. That incredibly “productive” meeting sealed the deal for an equally “productive” sale of 30,000 hours of consulting to the client with no deliverables, no schedule, and no guarantee as to the quality or qualifications of the consultants they would get.  For some reason I think there was a very similar meeting at the HECO offices a year or two ago.

What I find conspicuously absent from the HECO IRP is something called common sense.

It is implied in the report that the integration of significant additional amounts of Photo-Voltaic (PV) solar and wind into the grids on the various Hawaiian Islands will allow HECO to meet the RPS requirements while keeping electricity rate increases under control.  An independent analyst working for the Public Utility Commission did not agree. In what I would characterize as a very thorough and objective report the many issues with the HECO IRP are identified in detail.  The following quote summarizes the fundamental problem;

“The scope of the HECO Companies’ analyses seems to be more narrowly focused within the bounds of a work plan and approach using a specific scenario planning approach and a specific resource analysis model (Strategist) to analyze resource planning issues.

In other words, the IRP relies principally upon a computer modeling tool to generate answers rather than applying human logic to analyze reasonable alternatives.  In my experience with complex models used in the oil and gas industry this is not a winning strategy.

The challenge facing Hawaii can be visualized through two charts which focus on renewable generation in 2012;

One notable aspect of these charts is the large discrepancy between the Nameplate capacity and actual generation.  The Geothermal facility on the Big Island represents only 6% of nameplate capacity and yet it generated 21% of the total renewable electricity during the year.  The reason?  Geothermal is reliable.  In fact the Puna facility had a utilization rate of 80%.  The same situation applies to the large waste-to-energy plant on Oahu which incinerates most of the solid waste generated on Hawaii’s most populous Island and outputs up to 90 MW of electricity.

Wind energy generation is roughly equal to its proportion of nameplate capacity.  That sounds promising until you consider that about 50% of that production takes place at night in periods of low demand.  There are also frequent periods of relative calm so that relying upon wind is simply not feasible.

The area of most concern is with PV solar which happens to be the fastest growing source of renewable generation in the state.  Up until now the many financial incentives implemented to encourage the installation of roof-top solar panels have been very effective.  But the IRP acknowledges that  when the amount of PV Solar at mid-day reaches a critical point there are problems;

“When the aggregate PV capacity is greater than 100% of minimum load, this could result in power flow from the generating facilities back toward the substation, negatively impacting equipment loading, voltage, system operational impacts, and protection of the Company’s system.”

The widespread adoption of roof-top solar is also resulting in significant economic inequities amongst HECO customers.  This is something I discussed in a recent blog posting.  The IRP describes the situation as follows;

“As the amount of installed rooftop PV grows within Hawaii, it is creating significant economic cost transfers between groups of Hawaii’s citizens. These include the fact that Hawaii taxpayers are providing tax credit subsidies for new PV that do not accrue to non-PV owners; the feeder upgrade and operational requirements that increasing levels of PV impose upon utility customers; and as more PV owners (often more affluent citizens) generate their own energy, they leave fewer customers remaining on the utility system to pay for the fixed capital and operational non-energy costs of system operations.”

So from both physical infrastructure and economic fairness perspectives a continuation of the current pace of PV installations does not appear to be sustainable in my opinion.

Geothermal on the Big Island can and should increase to become the main source of electricity there.  That is great for the Big Island but there is no comparable Geothermal resource potential on the other Islands.

As noted, the charts above also highlight the significant contribution of the waste-to-energy plant on Oahu.  However, the 2012 upgrade to this facility resulted in the vast majority of Oahu’s solid waste being treated.  There simply is no more waste to use in this type of facility.

Hydro, although it has a relatively high utilization rate, has been mostly developed so that there is very limited potential for further increases in generation from that source.

The big “Other” category in the charts consists primarily of a single large bio-diesel plant (the Campbell Industrial Park Generation Station) which is run rarely as a peaking plant.  The cost of the biodiesel fuel is too high to justify continuous operation and as a result the plant had a utilization rate of only 2% in 2012.

The only other renewable mentioned prominently in the IRP is wind and that is problematic for many reasons.  Not only is it an unreliable source but it is very highly variable with wind  changing intensity and direction frequently and dramatically.  The small, isolated grids in Hawaii would be very difficult to stabilize if large amounts of wind generation were incorporated.  The IRP also states that the best wind resources are on the smaller Islands such as Lanai while the major load center is Honolulu.  The cost to lay submarine transmission cables between the Islands is very substantial.

All things considered the HECO IRP does not present anything close to a realistic plan to move Hawaii away from burning residual fuel oil to generate electricity.  The “Strategist” computer model is obviously good at generating many graphs and tables of data.  Whether any of the output really makes sense is another question.

I have spent a considerable amount of time looking at different scenarios for the Hawaiian Islands and proposed a different approach in a blog posting with the title “Hawaii Renewables facing Cross-currents and Headwinds”. I believe that Concentrated Solar Power plants with Thermal Energy Storage represent the best option for the state.

I have traveled to Hawaii many times and love every part of the state that I have had the pleasure to visit. I would like to see Hawaiian dependence upon hydro-carbons reduced or eliminated as quickly as possible. There are realistic options available to HECO. They just need to understand that they are on an island in the Pacific Ocean – not in that other place.

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