Category Archives: Lowering Electric Rates

Lowering Electric Rates, Peak Oil, Renewable Energy Sources

Learning From Germany & Others’ Energy Plans: No Free Lunch

Richard Ha writes:

Germany attempted to transition to a green electricity generation more than ten years ago. Today, some of its electricity rates are the highest in Europe, and it is using coal for 45 percent of its electricity. The lesson here is that there really isn’t any “free lunch.”

From Bloomberg.com today:

Merkel’s Taste for Coal to Upset $130 Billion Green Drive

By Julia Mengewein – Sep 22, 2014

When Germany kicked off its journey toward a system harnessing energy from wind and sun back in 2000, the goal was to protect the environment and build out climate-friendly power generation.

More than a decade later, Europe’s biggest economy is on course to miss its 2020 climate targets and greenhouse-gas emissions from power plants are virtually unchanged. Germany used coal, the dirtiest fuel, to generate 45 percent of its power last year, its highest level since 2007, as Chancellor Angela Merkel is phasing out nuclear in the wake of the Fukushima atomic accident in Japan three years ago.

The transition, dubbed the Energiewende, has so far added more than 100 billion euros ($134 billion) to the power bills of households, shop owners and small factories as renewable energy met a record 25 percent of demand last year. RWE AG (RWE), the nation’s biggest power producer, last year reported its first loss since 1949 as utility margins are getting squeezed because laws give green power priority to the grids….  Read the rest

How is HECO going to both lower our electricity rates and increase intermittent power into the grid? Seems we are going to bet everything on natural gas. At $4/thousand cubic feet (mcf), it is very cheap. In Asia and Europe, it’s more than $11/mcf.

What happens when its price rises in 10 and 20 years? Where will we be then? Will we have a competitive advantage to the rest of the world? Or will we be struggling, like Germany is today?

Where will we be 10 and 20 years from now? We should be paying attention to what people like Marco Mangelsdorf, president of ProVision Solar, and others are saying about the PUC’s request for an energy action plan for the state of Hawai‘i.

HECO’s Response to the PUC’s Orders: Is the Media Right? With Marco Mangelsdorf

Lowering Electric Rates

A Real Danger: The Rising Cost of Food

Richard Ha writes:

The rising cost of food is a real and present danger.

  • Last month the price of meat in the U.S. rose at the fastest rate in ten years.
  • The cost of shrimp is up 61 percent from a year ago.
  • It’s predicted that pork production may be down ten percent this year, due to a widespread virus, and the cost is already up 13 percent this year.
  • As all these costs go up, many people have turned to eating chicken, but even the price of chicken breast is up 12 percent since a year ago.

Right here on the Big Island, our Pahoa school complex has the highest percentage of students in the entire state participating in the free/subsidized school lunch program. EIGHTY-NINE percent of the students in the Pahoa school complex qualify for, and receive, free or subsidized lunches.

There are socioeconomic consequences to all of this, and it’s exactly why the Big Island Community Coalition is advocating so strongly for lower electricity prices, which will directly lead to lower food costs.

From peakoil.com:

As the price of meat continues to skyrocket, will it soon be considered a “luxury item” for most American families?  This week we learned that the price of meat in the United States rose at the fastest pace in more than 10 years last month….

The price of beef has also moved to unprecedented heights.  Thanks to the crippling drought that never seems to end in the western half of the nation, the size of the U.S. cattle herd has been declining for seven years in a row, and it is now the smallest that is has been since 1951….

And we already have tens of millions of people in this country that are struggling to feed themselves.  If you doubt this, please see my previous article entitled “Epidemic Of Hunger: New Report Says 49 Million Americans Are Dealing With Food Insecurity.”

So what happens if drought, diseases and plagues continue to cause food production in this country to plummet?

Read the rest

Bike, Lowering Electric Rates, Renewable Energy Sources, Sustainability

Bad: Change Just for the Sake of Change

Richard Ha writes:

Things are moving fast in terms of energy, and nobody knows, right now, where we are heading. Where we end up will not only shape our own futures, but it will also determine how easy or hard our children’s and grandchildren’s lives are.

The PUC just told HECO that the utility had better change what it’s doing, and HECO responded that it will. But there are lots of moving parts to this situation, and none of us know where things are going. 

Change merely for the sake of change is not wise, and it’s worrisome. We need to conscientiously adapt to conditions with careful consideration and purpose. We must have a smart vision, and work toward that vision.

Henry Curtis wrote that Energy Futurists Need Open Minds:

“…stakeholders and regulators need open dialogue on a variety of future scenarios.

And yet, although there are at least four different ways the future can unfold, many are gambling their careers by assuming that the Smart Grid scenario is the future and therefore all other scenarios can be ignored.

Later this month the U.S. Department of Energy (DOE) would hold public meetings to discuss their Programmatic Environmental Impact Statement.

The feds want to use the 1300-page document to develop guidance on how the DOE can fund the Smart Grid future.  They too have ignored the alternatives at their own peril….”

Being “first in the world” at something is a risky proposition. It’s far better to copy the first in the world. Folks who attempt to be first in the world frequently fail, and the question here is, who is going to pay if we try something and we fail?

From my perspective, it seems clear that we want a future that leaves no one behind and makes us competitive with the rest of the world.

Take mountain bikes, for example. Nowadays they have shock absorbers, multiple gears, lightweight material and instrumentation that aids the rider. The tool kit is very light and efficient. But the heart of the system, the wheels, are still round.

Say we want to improve a bicycle to win a race. Do we make a unicycle? A bicycle with every innovation but only one wheel? 

We need to be clear about what we want. It’s better to carefully consider the heart of the bike, which is its rider and energy source. Do we want the leanest, meanest bicycle rider – i.e., the best and cheapest energy source? Or a one-wheeled bicycle? Do we want a bicycle with fenders, flaps, mirrors, titanium saddlebags and just an average or slow rider?

Mina Morita, Chair of the PUC, likened the electric grid to an ‘auwai. It’s the irrigation system that keeps a lo‘i alive.

Certainly what we are looking for as we reshape our energy future is a combination of things. We need to make careful choices that make good sense in the long run. We can’t change merely for change’s sake. It’s going to be a long race, and we want to come out ahead.

Geothermal, Lowering Electric Rates, Peak Oil, Renewable Energy Sources

‘Behind the Plug & Beyond the Barrel’

Richard Ha writes:

I spoke on behalf of the Big Island Community Coalition (BICC) at the Hawai‘i Island Renewable Energy Solutions Summit 2014 on April 30th, which was titled “Behind the Plug and Beyond the Barrel," and here's what I said: 

BICC mission

Good morning. Thanks for the introduction. I will use just this one slide, and you can read our mission statement on it, which is to lower the cost of electricity. “To make Big Island electricity rates the lowest in the state by emphasizing the use of local resources.”

I would like to spend some time talking about who makes up the BICC.

Dave DeLuz, Jr. – President of Big Island Toyota.

John Dill – Contractors Association, and Chair of the Ethics Commission

Rockne Freitas – Former Chancellor Hawai‘i Community College

Michelle Galimba – Rancher, Board of Agriculture

Richard Ha – Farmer

Wallace Ishibashi – Royal Order of Kamehameha, DHHL Commissioner

Kuulei Kealoha Cooper- Trustee, Jimmy Kealoha and Miulan Kealoha Trust.

Noe Kalipi – Former staffer for Sen Akaka, helped write the Akaka Bill, energy consultant

Kai'u Kimura- Executive Director of ‘Imiloa.

Bobby Lindsey – OHA Trustee

Monty Richards – Kahua Ranch

Marcia Sakai – Vice Chancellor for Administrative Affairs, former Dean of UH Hilo, College of Business

Bill Walter- President of Shipman, Ltd., which is the largest landowner in Puna.

These folks are all operating in their private capacities. I'm chair of the BICC, and the only person from Hawai‘i to have attended five Peak Oil conferences. I've visited Iceland and the Philippines with Mayor Kenoi's exploratory group.

As you can imagine, the BICC has strong support all across political parties and socioeconomic strata. People get it in five minutes.

Oil and gas are finite resources, and prices will rise.  One note about natural gas: the decline rate of the average gas well is very high. Ninety percent of the production comes out in five years. This is worrisome.

Hawai‘i Island relies on oil for sixty percent of its electricity generation; the U.S. mainland only two percent.

As the price of oil rises, our food manufacturers and producers become less competitive, as we all know. Food security involves farmers farming. And if the farmers make money, the farmers will farm.

What can we do?  By driving the cost of electricity down, the Big Island can have a competitive edge to the rest of the world.

Since rising electricity rates act like a giant regressive tax, lowering electricity rates would do just the opposite. And since two-thirds of the economy is made up of consumer spending, this would be like "trickle up" economics. If the rubbah slippah folks had extra money, they would spend and everyone would benefit.

 The lowest-hanging fruit:

1. Geothermal. Allows us to dodge the finite resource bullet. It is the lowest-cost base power. The Big Island will be over the hot spot for 500,000 to a million years.

2. We throw away many lots of MW of electricity every night. Hu Honua will probably throw away 10 MW for ten hours every night. PGV, maybe 7 MW for ten hours.

3. Wind, too.

Maybe HELCO will allow us to move the excess electricity free. They don't make any money on the throwaway power now, anyway. What if we used it for something that won't compete with them? Then people could bid for the excess, throwaway power for hydrogen fueling stations, to make ammonia fertilizer, and to attract data centers. Hawaii could become the renewable energy capital of the world. People would love to come here and look at that. As airline ticket costs rise, the walk around cost in Hawai‘i would not.

The BICC call for lowering electricity costs could leave future generations a better Hawai‘i.  And that is what we all want.

Lowering Electric Rates, Renewable Energy Sources

Check Out the Big Island Community Coalition

Richard Ha writes:

I'm going to be speaking this week on behalf of the Big Island Community Coalition (BICC).

Our mission is to "Make Big Island electricity rates the lowest in the state by emphasizing the use of local resources." 

Have you checked out our website? (Click photo to enlarge.)

BICC site

Join us at BICC – it's as easy as giving us your contact info – and we will keep you in the loop; we'll let you know what we are doing and also how you can help.  

I'll tell you a bit more about this later in the week.

Lowering Electric Rates, Peak Oil, Renewable Energy Sources, Sustainability

Response to Jack Roney’s Response

1 Comment

Richard Ha writes:

Jack Roney wrote an insightful and very well thought-out response to my BICC editorial Cheap Power for Hawaii Island, which ran in the Hawaii Tribune-Herald on April 13th.

We agree with Jack’s point, actually, that reliability should be the first priority of the electric utility. We just come at it in a slightly different way.

The Big Island Community Coalition (BICC) requires that renewable energy options be the best combination of the sustainability’s “triple bottom line:” They must be socially sustainable, environmentally sustainable and economically sustainable.

Presently, what does the best job of meeting the sustainability triple bottom line is the electrical grid. Specifically, it’s the most democratic way to deliver services that we have right now, and therefore it meets the socially sustainable requirement. (This doesn’t preclude something being developed in the future that better serves the sustainability triple bottom line.)

But more Hawaiians live outside of Hawai‘i now than in it, and rising electricity costs are going to cause more and more Hawaiians to leave the state and seek jobs so they are able to support their families. A condition that causes people of the host culture to leave their ancestral lands in greater and greater numbers is not sustainable.

In order for a renewable resource to replace a fossil fuel one, it must perform better on the triple bottom line assessment. It’s not only about the color of the oil – it’s about the cost, and the environmental and social impact of the alternative.

Solar is problematic, as Jack points out, from the standpoint of reliability. And folks who cannot leave the grid will find themselves increasingly paying more for the grid that those who can afford to leave will have left behind. That is not socially sustainable.

Geothermal electricity is by far the lowest cost and it’s available 24/7. It provides the same characteristics as oil but is environmentally friendly, and because of its low cost it’s more socially sustainable than oil. Fewer Hawaiians (and others) will have to leave Hawai‘i. And geothermal’s low stable cost, relative to petroleum oil, will make the Big Island relatively more competitive to the rest of the world regarding electricity. Geothermal satisfies the triple sustainability bottom line.

The PUC gave HELCO a 120-day deadline to explain how their recent 50MW request for geothermal proposals will result in lower costs to the ratepayer, and that deadline is up in a few days. HELCO will need to show a plan that retires oil-fired plants.

The BICC appreciates that the PUC, under Mina Morita’s leadership, has taken a view that ratepayer cost is a top priority. But this is not just a feel-good approach. The triple sustainability bottom line approach is a long term, pono, approach that does the right thing for us as well as future generations. It sets us up to be more competitive to the rest of the world.

Aloha, Jack Roney, for your well thought-out letter to the editor!

Food Security, Geothermal, Lowering Electric Rates

Big Island Cuts Off Nose, Spites Face

1 Comment

Richard Ha writes:

According to Hawai‘i Rural Development Council surveys, food security is Hawai‘i’s number one priority. “Difficulties faced by local farmers” is number 3, and “GMO agriculture” is number 5.

Banning GMOs (a much lower priority issue) threatens our food security (our most important concern).

I say this all the time because it’s so important to remember: If the farmers make money, the farmers will farm. We need our farmers farming in order to have food security here in Hawai‘i. We need to work toward that end.

One way to do that is to remember that agriculture and energy are inextricably tied together. Working toward having low-cost energy here on the Big Island will strongly benefit both our farmers and the rest of our people—it lowers food cooling costs for both farmers and their customers. It will help the farmers to farm, which will increase our food security.

We are lucky to have the option here of generating electricity with geothermal. Geothermal-generated electricity is similar to oil in its characteristics. It is steady. And very importantly, it costs only half as much as oil and will not run out anytime soon.

It’s all related. Geothermal energy means lower electric bills, for both farmers and consumers. Lower electric bills means farmers keep farming, and consumers have more food security out here in the Pacific where we important 80 percent of our food or more. Lower electric costs also mean consumers have more discretionary income, and that helps our local economy.

Banning GMOs (a.k.a., biotech solutions to farming problems, which all our competitors will be able to use) moves us in exactly the wrong direction.

Big Island, Education, Geothermal, Hydrogen, Lowering Electric Rates, Mauna Kea, Peak Oil, Science, Sustainability, Where We Live

A Big Picture Look

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Richard Ha writes:

Yesterday I sat in Judge Nakamura’s courtroom full of people both for and against the Thirty Meter Telescope (TMT) being built on Mauna Kea. I looked over at Kealoha Pisciotta, who has led the opposition all these years, and thought about how much I admire her.

As I sat there, I thought back to 2008, when rising oil prices started being such a big concern. At the top of my mind then was finding an economic alternative to tourism and opportunities for keiki education, both of which the TMT will provide. Locating the TMT here is a great opportunity, and I put a lot of effort into supporting it.

As I sat there yesterday, I thought, too, about how the TMT will help the Big Island cope with our rising energy costs and changing economy; because of it, money will flow into our economy instead of out. It will bring 10 years of construction jobs, and $1 million/year toward Big Island student education for each of more than 55 years. More importantly, it will bring to the Big Island an attitude of “Not, No Can. CAN!”

In 2007, I’d met Gail Tverberg at my first Peak Oil conference in Houston. A former insurance actuary whose job was to price insurance risk, she is someone who approaches the world oil supply problem from a risk management perspective. I helped bring her to the Big Island to give presentations, and she observed that our dependence on tourism makes Hawai‘i very vulnerable.

In 2008, shale and gas production hadn’t yet started in earnest. Natural gas prices were very high at $12/thousand cubic feet. According to a USDA analysis, there was an 80 percent correlation of natural gas price to ammonia fertilizer cost, and that had a frightening effect on local farmers. The price of natural gas dropped to $2/mcf, and now it’s around $4.50/mcf. This, coupled with a subsequent increase in natural gas supply, has given us some breathing room. But it’s only temporary.

We have another fairly unique opportunity to protect ourselves against seriously rising energy costs, which are already impacting our lives negatively and will continue to go up if we don’t make changes:

Geothermal energy.

After having attended five Association for the Study conferences (the only person from our state to do so) I’ve found that it’s all a matter of 1) cost, 2) what works and 3) comparative risk.

Geothermal addresses all three of those points. It’s inexpensive compared to using oil to produce our energy; we already know that it works; and after decades of experience with it here, the comparative risk is low.

It also allows the possibility of making hydrogen, which we can use to fuel our ground transportation, and also ammonia fertilizer for farmers. There are a lot of wins there.

Aquaponics, Big Island, Community, Eating Locally, Family of Farms, Food Security, History, How It All Started, Hydroelectric, Lowering Electric Rates, Peak Oil, Renewable Energy Sources, Sustainability, The New Ahupua‘a, Watercress

The New Ahupuaa, Revisited

Richard Ha writes:

This is a post I wrote back in 2007. I recently reread it and realized it's the same story as what's happening today. It's six years later, and people still don't realize we don't have time to fool around.

I'm going to rerun the post here.

***

October 10, 2007

I spoke at the Hawai‘i Island Food Summit this past weekend, which was attended by Hawaiian cultural people, policy makers, university researchers, farmers, ranchers, and others.

The two-day conference asked the question, “How Can Hawai‘i Feed Itself?”

I felt like a small kid in class with his hand raised: “Call me! Call me!”

I sat on one of the panels, and said that our sustainability philosophy has to do with taking a long-term view of things. We are always moving so we’ll be in the proper position for the environment we anticipate five, 10 and 20 years from now.

I told them I had a nightmare that there would be a big meeting down by the pier one day, where they announce that food supplies were short because the oil supply was short and so we would have to send thousands of people out to discover new land.

I was afraid that they would send all the people with white hair out on the boats to find new land—all the Grandmas and Grandpas and me, but maybe not June.

Grandmas and Grandpas hobbled onto the boats with their canes and their wheelchairs, clutching all their medicines, and everybody gave all of us flower leis, and everyone was saying, “Aloha, Aloha, call us when you find land! Aloha!”

I spoke about where we want to be in five, 10 or 20 years. We know that energy-related costs will be high then. And that we need to provide food for Hawai‘i’s people.

We call our plan “The New Ahupua‘a.”

In old Hawai‘i, the ahupua‘a was a land division that stretched from the uplands to the sea, and it contained the resources necessary to support its human population—from fish and salt to fertile land for farming and, high up, wood for building, as well as much more.

Our “New Ahupua‘a” uses old knowledge along with modern technology to make the best use of our own land system and resources. We will move forward by looking backward.

• We plan to decouple ourselves from fossil fuel costs by developing a hydroelectric plant, which will allow us to grow various crops not normally grown at our location.

• We are moving toward a “village” concept of farming, and starting to include farmers from the area, who grow things we don’t, to farm with us. This way, the people who work on our farm come from the area around our farm. We will help them with food safety, pest control issues and distribution.

• We are developing a farmers market at our property on the highway, where the farmers who work with us can market their products.

• We will utilize as much of our own resources for fertilizer as possible, by developing a system of aquaponics, etc.

This “New Ahupua‘a” is our general framework for the future. It will allow us to produce more food than we can produce by ourselves. It is a safe strategy, in case the worst scenario happens; if it doesn’t, this plan will not hurt us.

It is a simple strategy. And we are committed to it.

My assessment of how we came to be here and where we need to be in the future is this: In the beginning, one hundred percent of the energy for food came from the sun. The mastodons ate leaves, the saber tooth tiger ate the mastodon and we ate the tiger and everything else.

The earth’s population was related to the amount of food we could gather or catch. And sometimes the food caught and ate us. So there were only so many of us roaming around.

Then some of us started to use horses and mules to help us grow food. As well as the sun, now animals provided some of the energy for cultivating food. We were able to grow more food, and so there were more of us.

About 150 years ago, we discovered oil. With oil we could utilize millions of horsepower to grow food—and we didn’t even need horses. Oil was plentiful and cheap; only about $3/barrel. We used oil to manufacture fertilizer, chemicals and for packaging and transportation.

Food became very, very plentiful and we started going to supermarkets to harvest and hunt for our food. Hunting for our food at the supermarkets was very good—the food did not eat us and now there are many, many, many of us.

But now we are approaching another change to the status quo—a situation being called “Peak Oil.” That’s when half of all the oil in existence is used up. Half the oil will still be left, but it will be increasingly hard to tap. At some point, the demand for oil—by billions and billions of people who cannot wait to get in their car and drive to McDonalds—will exceed the ability to pump that oil.

Food was cheap in the past because oil was cheap. Five years ago, oil was $30/barrel but now it’s over $80/barrel. Now that oil is becoming more and more expensive, food is also going to become much more expensive.

In the beginning the sun provided a hundred percent of the energy and it was free. Today oil is becoming very expensive, but sun energy is still free.  The wind, the waves, the water—they are all free here in Hawaii. It’s the oil that is expensive.

For Hamakua Springs, the situation is not complicated at all. We need to use an alternate form of energy to help us grow food!

With alternate energy, we should be able to continue growing food—and maybe local food can be grown cheaper than food that is shipped here from far away.

I told the Food Summit attendees that we farmers need to grow plenty of food so that others can do what they do and so we continue to have a vibrant society. If we don’t plan ahead to provide enough food, and as a consequence every family has to return to farming to feed themselves, it would be a much more limited society. People would not be able to pursue the arts, write books, explore space. We would have way fewer choices – maybe only, “What color malo should I wear today?”

There was a feeling going through the Food Summit’s crowd that we were a part of something very important and very special. What I found different about this conference is that people left feeling that this was just the beginning.

We are going to take action.

***

Geothermal, Lowering Electric Rates, Peak Oil, Renewable Energy Sources, Sustainability

Robert Rapier & Tar Sands

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Richard Ha writes:

I talked to my friend Robert Rapier yesterday. He had just returned from seeing the tar sands in Canada.  

Robert Rapier is a chemical engineer with 20 years of international engineering experience in the energy business. He holds several patents related to his work. Robert is the author of Power Plays: Energy Options in the Age of Peak Oil. He is also the author of the R-Squared Energy Column and is Chief Investment Strategist for Investing Daily’s Energy Strategist service. Robert has appeared on The History Channel and PBS, and his articles have appeared in numerous media outlets, including the Wall Street Journal, Washington Post, Christian Science Monitor, The Economist, and Forbes.

Here’s a blog post he wrote just before he went.

He told me some interesting stuff about the energy return on energy invested, which was better than I had thought, and about the break-even point of tar sands, which were lower than I expected. He had some interesting ecological observations, too, and will be writing about this soon. He’s also going to appear on national television, soon.

One of the reasons I like Robert is because, in local Hawai‘i terms, he’s a "scrappah.” He’s like our mayor, Billy Kenoi – he is both smart and tough.

I asked him what he thought of the Big Island’s energy prospects, and he said that geothermal appears to be one of the lowest-hanging fruit. I agree!

In a previous blog post, he pointed out that leveraging the sun has promise, nationwide, and observed that solar panel prices are steadily declining.

I agree about leveraging sunshine. As a farmer, I think of plant leaves as solar collectors. We have a year-round growing season here, and we have been using petroleum-based pesticides to help farmers control the year-round pests. If we can use biotechnology in a smart and safe way to help us control pests, it will lower food production costs and help our whole economy.

Instead of losing ground as oil prices rise, we can position ourselves so that all farmers have a competitive advantage to those on the mainland.

Right now, our state goal is to reach 10 percent self-sufficiency. We have to do better than that.