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Home My WebLink AboutCOM 0145.000 2016-2018 IV OF Cour ofHawai 1 OJA,....H,k + Phone: (808) 961-8564 Council District 9- ��`I''ti' (808) 887-2069 North and South Kohala `k•"1"s,*:+ : rc Email: tinl.rrchardscOairaizcounzp.gor T,T�OF NF's►' HERBERT M. "TIM" RICHARDS, III HAWAI`I COUNTY COUNCIL District 9 25 Aupuni Street, Ste. 1402, Hilo, Hawui'i 96720 COUNTY CLERK COUNTY OF HAWAII RECEIVED DATE: February 21, 2017 Time /2:30PAt By 11//t' Date-7=24 2,p" TO: Valerie T. Poindexter, Chairwoman and Members of the Hawaii County Council FROM: im Richards, Council Member Council District 9 - North and South Kohala SUBJECT: Presentation entitled "Paniolo Power"" Aloha! As noted in my February 16, 2017 presentation request memo, it is my intention to provide quality education and overview of specific focuses within the context of the Committee on Agriculture, Water and Energy Sustainability early on. With agriculture recently addressed, I respectfully request an hour of time to have a presentation on energy and water be heard on the March 21, 2017 meeting. The presentation entitled "Paniolo Power" would be provided by Mr. Jose Dizon; a highly experienced and educated energy expert. Due to the Council Chair memo dated January 9, 2017 entitled "Committee Presentations During Budget Season" disallowing presentations between March 31, 2017 and July 3, 2017 for understandable reasons, I humbly ask for the allowance of this presentation be held on March 21. 2017 to help guide the future thought process on energy going forward. Please note that the PowerPoint presentation to be used during the presentation has previously been emailed to the appropriate Council Services staff members as directed, and is also attached hereto on a"Lexar"jump drive with the specific PowerPoint presentation and bio of Mr. Dizon uploaded for necessary processing. Your consideration to this request is greatly appreciated. Mahalo! HTR:dbk R fmom.No. �� 11.w6SC, Attachment: Presentation material via Lexar jump drive Ref.Dote Ftb. X3,101'1 Hawaii County is an Equal Opportunity Provider and Employer s s �CVMPT �I�oParkerVRandi i Alternative Thinking about Energy for the Big Island Jose S. Dizon, P.E., General Manager, Paniolo Power Company LLC I Parker Ranch, Inc. Committee on Agriculture, Water and Energy Sustainability - March 7, 2017 1 ParkerVRan& ��&47 ---�- _ Parker Ranch Overview • Founded in 1847 by John Palmer Parker, who married Chiefess Kipikane, the granddaughter of King Kamehameha • 5t" largest ranch in the U.S., operating as a cattle ranch s for 170 years • The ranch covers 130,000 acres surrounding the town of Waimea in North Hawaii on the Big Island • 6t" generation descendant Richard Smart left the ranch to a beneficial trust in 1992 with the mission to maintain and improve the lifestyle and quality of life of Waimea and its residents • Parker Ranch's beneficiaries include the North Hawaii Community Hospital, the Parker School, Hawaii Preparatory Academy, and the Hawaii Community Foundation Parker Ranch Foundation Trust Mission Statement and Beneficiaries ParkerVRancli NORTH HAWAII Co1VIMUNIW HOSPITAL w RN AFFILIATE OF THE OUEENS HEALTH SYSTEMS PARXE R SCHOOL �� HPA- Hawaii Preparatory Academy HAwAri FouN DATION Parke VRandi est 1$4 Parker Ranch Initiatives Paniolo Power Company Paniolo Cattle Company • Joint venture with Ulupono Initiative • Create an at-home thriving cattle industry that is energy-efficient and protects against volatility in fuel and feed costs • Create quality and consistency in beef at reasonable prices for restaurants ad food markets • Unlock the renewable energy potential at Parker Ranch • Pursue projects that benefit the community and all island residents • Address the energy-water-ag nexus 2 - � o D y 1K►art�+yn Parker Ranch has World Class Wind Resources ;,,,. - - - esoow- aooaer ewom m [ � .._ ' - •.�' ,tea _ �nry -. , ... 4 - AR@_C= NNR2 O t- •4W O ,+ GO 200 2 WD NX f o 1 300-406 = , 406.5W 576 -Em 9 j Source: National Renewable Energy Laboratory (NREL) AWS Truewind Wind Maps 0—fly B-IdOq' m Pxaut�cars vim 5uces M_ + ,. •. ka fcc •� Cxi + E&rn 1Rx } / r HmLen cx': kw 15 3i W c H •f" ?c�vicn �T{2rr a. nl'Rbi: 5 '�-y — — G aLLan ar WIS lrue{m] r..a�p tle. LtrdA y^:em.no 555 i+'WS 1wu�rn u¢%ns xis .tea., eoyr :re.�ee � s ee000c eauaoo ewaaa ... e.--, rnn-a,. ��u�. 5 PA.NIQLQ POW JER COMPANY llb.--R-.ddd 1 Parker Ranch has tremendous solar resources as well hae MMMMEELtv U Parke r'U'Ranch 1 S4- V AVNOMMM� a+mea a - ii a° Energy Storage is a transformational resource Battery Energy Storage ■ Short & long duration — Seconds -to -minutes, minutes -to - hours — Regulation/sub-hourly flexibility — contingency reserves ■ Synthetic Inertia ■ Ramping ■ Requires periodic cell replacement, 7- ParkeRanch cs[.1J4- Pumped Storage Hydro ■ Long duration — Minutes -to -hours ■ Regulation/sub-hourly flexibility and contingency reserves while simultaneously pumping to reduce RE curtailment ■ Rotor inertia ■ Ramping — down/up — minutes -to -hours 10 years ■ Avoid curtailment of RE ■ Effective for over -generation �45fi cvntaincr Uimcrehiun: 13m x 2,4m k y.HRI ■ Peak shave ■ Use as a variable load to couple with _aft_ geothermal (prevent cyclic stresses of production wells) - ■ Long life, 50-100 years I BE55- 1 MW System I4� Lower Reservoir Energy Storage is a transformational resource Turbines for pumping and electricity generation Acts as a load by pumping water uphill Acts as a generator by letting water flow "Closed system" no streams or ocean use Parker est. 1847 Pow- JER COMPANY EP6SITO SUPERIOR 2 DE VALVULAS ■ PARQUE TUBE WAS FORZADAS 0 �_ L .s J 0EP6SIT0 INFERIOR ■ ■ CENTRAL DE SOMBEO Y SUBESTACION-HIDROE6UCA ■ • CENTRAL HIDROELL A CENTRAL DIESEL 0 LLANOS BIANcos ■ PUERTO DE LA ESTACA N PA.NIQLQ PQW- L'R COMPANY _R-.,dd 200 180 Act as a load to enable wind/PV 12(200 100 80 60 40 20 Pumped Storage Hydro Parke Ranch s[.1J4� is a transformational resource HELCO - High Solar Day 2030 Act as a generator to shave peaks and enable RE 0 � EftdE6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Derived from HELCO response to PUC -IR -3, Docket No. 2014-0183 (PSIP) ❑ PV WIND LNG ■ GEOTHERMAL HELCO HYDRO ■ BIOMASS —SOLAR PROFILE 10 10 ° Key Components of our Strategy: Parker'U'Ranch Optimize Best Resources to Lower Costs Waimea and N. Kohala wind corridors are among the best in the State, considered "world-class" due to high average wind speeds and capacity factors. 300MW to 500MW potential with capacity factors in excess of 61%. A proven resource whose installation cost continues to decline. There is over 200MW solar PV potential on Parker Ranch. Solar PV provides power during the mid-day when wind speeds typically drop. n 7,000 feet of elevation change on the Ranch; 48 potential reservoir location sites with 49 different project configurations were modeled to provide load -shifting capability. Long- lived assets (100 years+) provide potential lowest cost storage. Water use also supports agriculture. Source: Paniolo Power - Siemens IRP and Microgrid Study, AWS TruePower report on North Kohala wind data 11 PA.NIQLQ PQW- L'R COMPANY -k-.,dd Fossi HELCO Electric Grid ParkeR.anch esL 1&47 F Wind (21MW) Power Supply Improvement Plan, 8/26/2014 Adequacy of Supply Report, 1/29/2016 Effective rate summary, 12/28/2016 PA.NIQLQ Pow- J'R COMPANY -R-.,dd Fossi HELCO Electric Grid ParkeRanch est. 1947 Wind (21MW) A World Class Energy Team Selected to PkeVRan� �,4. �h Study Parker Ranch Resources and Systems Booz I Allen I Hamilton PACE G LOB A L f 1�A.Ni;FyL'_ t� 2014 CASE STUDY COMPANY = MODERNIZING THE GRID MICROGRID ON THE BIG ISLAND How a Hawaiian cattle ranch is taking its energy future into its own hands { "b �r4fi,10 www.UtllityDive.com 0000 Phase 1 developed scenarios using Parker Ranch resources. Cost projections were compared to the 2013 HELCO IRP [The HELCO IRP was rejected by the PUC] f ��S7tiFE'R Game COMPANY Not Zero Capital dower Rates Investment $800M to $1.26 $600M to $800M of ratepayer benefit �y (value of avoided purchases of fossil fuels) with ~$200M of potentially stranded assets Exporting less capital for energy 4 Wealth effect contributing to GDP growth ParkeRanch est.IS47 of 1.5x to 1.7x equivalent to $900M to $1.4B , o Parker Grid Connected, Sustainable Mixed Generation Portfolio — Defines the Alternative Strategy (Break -Away) Wind New Sub Legend 0 PR Control Center • 69/12.5 KV Substation PR Renewable Generation PR Conventional generation — 69 KV Transmission Line 35 KV upgraded to 69 KV - HELCO 12.5 KV Distribution Network — PR 12.5 KV Distribution Network Point of Interconnection to HELCO Kean Waikii Sub Puukapu Sub itorage Hydroelectric (PSH) f Pow-JE'R COMPANY _ Phase 2 explored Parkerwhether all island HEADQUARTERS residents can benefit from Parker Ranch's renewable energy resources. The answer is YES. Cost projections were compared to the 2014 PSIP. Parker Ranch, Inc- and Paniolo Power Company, LLC Study of Electric Supply Option for the Island of Hawaii [The PUC had concerns with the 2014 PSIP July 2615 and ordered HELCO to re -do it] PA.NIQLQ POWJE'R COMPANY -R' Renewable Energy Customer Benefit Customer value Plan summary HELCO PSIP 92% 27% reduction in cost Parke Ranch cc[. 1 J4- 106% > 27% reduction Greater customer value 19 PA.NIQLQ Pow- J'R COMPANY -R-.,dd Fossi HELCO Electric Grid ParkeRanch est. 1947 Wind (21MW) Paradigm Shift Parker est. 1847 Using the Resources in Waimea/N. Kohala • Wind (21MW) Note: "fossil labels" removed to aid in clarity Or, a series of Integrated Energy Districts Parke Ranch est -1947 f� PA.NIQLQ Pow- J'R COMPANY _R' Paniolo Power Plan (P3) Strategies Parker' Ranch es[.154: Demonstrate Value of Alternative Microgrid and Island Wide Solutions Develop Most Realistic and Compelling Alternative Portfolio to Replace Oil -Fired Generation on the Island within 10 years Advocate for Policy & Regulatory Frameworks with the PUC to enable Regional & Island - Wide Solutions in 5-10 years Counterintuitive insights Dramatic increase in capital spending produces lower electricity rates (adding to rate base cuts rates) Holistic systemwide alternative plans generate massive value for both utility and ratepayer (classic case of the failure of incremental thinking) Government's role is value -adding (powerful combination of political pressure and enlightened regulatory policies/frameworks) Innovation triggering shift of risks from ratepayer to shareholder Diaspora of change agents include large landowners who are direct affected by impact of affordability on land values and also control significant energy potential Plans transforming energy landscape are more important than ownership/control in the long run Islands are the center of the universe because of our values and attitudes about community and resource flows Parker '�, Ranch Other Thoughts mt 1847 The electric utilities are focused on energy costs because of their regulatory compact: LiSynergies relating to waste management and energy are not in their purview even though there may be a greater benefit to the island residents (ratepayer vs. taxpayer subsidy). The utilities prefer battery systems over pumped storage hydro. The latter is a better fit for our agricultural industry (addresses the ag-energy nexus). The utilities are arguably trying hard to meet regulatory, legislative and customer expectations while keeping within their vertically -integrated business model; conversely, the existing utility business model could be limiting our renewable energy and economic potential. Other business models should be explored. With the PSIP and HEP regulatory dockets coming to a close, Paniolo Power will now vigorously pursue RE development opportunities to benefit all island residents. f POWER COMPANY 'rii