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COM 0547.001 2006-2008
HAWAII COUNTY ENERGY SUSTAINABILITY PLAN Initial Steps Toward Energy Sustainability 1. Revise the Model Energy Code for residential buildings 2. Update the energy codes for commercial buildings 3. Implement a LEAD BY EXAMPLE program, so that County purchases and investments maximize energy efficiency . Transition the County vehicle fleet to fuel efficient vehicles . Install photovoltaic modules and solar hot water systems on County buildings . Install photovoltaic or LED street lighting where possible 4. Create a five person Energy Commission to determine energy initiative priorities, evaluate resource needs, establish benchmarks, and direct the hiring of a County energy specialist 5. Continue expanding the successful free public transport system G. Distribute Hawaii County-specific Energy Guide Labels for household appliance retailers 7. Continue ongoing efforts to assess the costs, benefits, and environmental impacts of different biofuels feedstocks 8. Initiate a comprehensive public education and outreach program to increase citizen awareness and participation in energy goals Comm. No.__`'~-- Ref. To: ~~se"eM Ref. Dote 0 WHAT IS HAWAII COUNTY'S FUTURE ENERGY USE? BUSINESS AS USUAL -Where nearly 90% of the energy economy continues to leave the island. 50 Hietorical Future 45 y 40 _T m 35 c q;cG; ° 30 ®Renewable Elec 25 c 20 ~ W ¦ Fossil Liquid m 15 Fuel E ®Fossil Elec a` 10 5 0 O d' OJ N r0 O V OJ N N O V m N N N rn rn O O O N N N rn rn rn rn rn O O O O O O O O e- ~ N N N N N N N N FUTURE WITH CONCERTED ACTION -Where over 70% of the energy economy stays here. 50 Historical Future 45 +a: 40 _T m 35 ~ 30 ''~'i_ ®Efficiency .T 25 3N'~ v ~ ~ ®Renewable m Generation c 20 ¦ Fossil Fuel W m 15 a E a` 10 5 0 O V of N O O V W N b O V CO ro ~ O] rn rn O O O ~ ~ N N N m m rn rn rn o 0 0 0 0 0 0 0 N N N N N N N N PROPOSED ENERGY CODE CHANGES FOR IiAWAI'I COUNTY PURPOSE OF ENERGY CODE 1. Lower monthly utility bills over the life of the building; 2. Reduce electricity growth rates and stress on the electricity grid; 3. Reduce County dependency on imported fossil fuel. EXISTING ENERGY CODE Hawaii County is the only county that has not updated its energy code. Most of the technology cited in the present code is obsolete. Hawaii County currently uses a national building energy code known as ASHRAE 90.1-1989. ASHRAE is the American Society of Heating, Refrigerating, and Aix Conditioning Engineers, a nationally recognized association of some 65,000 mechanical engineers and related professionals producing dozens of building-related standards and guidelines. The number 90.1 refers to the energy sector and 1989 is the year this particular code was issued, meaning the research that went into producing the existing code reflects primarily 1980's technology. PROPOSED ENERGY CODE It is proposed that Hawaii County revise its energy code to ASHRAE 90.1-204. The most important revisions made between 1989 and 2004 axe in air conditioning and lighting. The efficiency of the air conditioning equipment in the 2004 revision is on average about 17% more efficient than the equipment ratings cited in the 1989 version. Efficiency in this case measures the amount of cold air produced by one watt of electricity. Lighting efficiencies are increased by about 25%, meaning that 25% fewer watts axe allowed in a given space to produce the desired level of illumination. In both cases, the improved efficiency mirrors improvements made between 1989 and 2004. The efficient equipment is the industry norm and may be purchased "off the shelf ' at reasonable prices. Energy codes are intended to dissuade the use of older, outmoded equipment. Many buildings axe built above ASHRAE 90.1-2004 standards because the builder will own the building and wishes to minimize energy costs and optimize occupant comfort. Builders who have no vested uitexest in the building once it is completed axe tempted to specify the lowest cost components on the market with little thought of cost-effectiveness ox occupant comfort during the building's life. EFFECT ON COUNTY BUILDING DEPARTMENT The code change would have a negligible effect on the Building Department's resources. Energy is not a health ox safety issue, which axe plan checkers' and building inspectors' prime concerns. The lead architect ox engineer signing off on a certification sheet and attaching calculations can show compliance. This is the process used in Honolulu and Maui counties. Howard C. Wiig, Energy Analyst Department of Business, Economic Development, and Tourism August 1, 2007 1 PROPOSED RESIDENTIAL CODE CHANGES FOR HAWAII COUNTY PURPOSE OF RESIDENTIAL CODE 1. Lower monthly utility bills fox the homeowner over the life of the home; 2. Reduce electricity growth rates and stress on the electricity grid; 3. Reduce County dependency on imported fossil fuel. EXISTING RESIDENTIAL CODE Hawaii County's existing energy code has not been updated since 1994. The current code requires homes designed for central air conditioning have R-19 insulation in the roof and R -11 in the walls. No codes exist for homes designed without air conditioning or designed forwindow-unit air conditioners. The "R" stands fox resistance to heat transfer. The higher the number, the greater the resistance of the structure to allow the sun's heat to transfer from the outside to the home's interior. PROPOSED RESIDENTIAL CODE The proposed code will apply to all new homes and deal with the roof, walls and windows. The reason for applying to all homes is that many homes axe uncomfortably hot because they are inadequately insulated and allow the sun to heat the interior to over 90 degrees on hot days. Homes complying with the proposed code will be at least eight degrees, and in some cases, 12 degrees cooler than an uninsulated home. The reduced temperature often negates the need for air conditioning. If conditioning is needed, a smaller unit can be purchased at a considerably lower price. In the roof, the proposed code would allow not only conventional fiberglass or foam insulation, but the use of radiant barriers, cool roofs and solar fans as means of keeping the attic, and hence the interior naturally cool. Each of these methods is extremely affordable. The counties of Honolulu and Maui have this roof code in place. R-11 would be required in the walls, with credit given fox reflective exterior coatings. This option offers more flexibility in R-11. Windows would have a minimum 0.40 solar heat gain.coefficient. This means that only 40% (or less) of the sun's heat striking a window would penetrate through the window. A standard single-pane window allows about 90% of the heat through, creating a greenhouse effect in the home. This high-performance glass is now the industry standard by all manufacturers, making the price cost-competitive with the older types of window glass. EFFECT ON COUNTY BUILDING DEPARTMENT The code change would have a negligible effect on the Building Department's resources. Energy is not a health ox safety issue. The engineer or architect signing off on a compliance sheet and attaching calculations may indicate compliance. This is the process used in Honolulu and Maui counties. Howard C. Wiig, Energy Analyst Department of Business, Economic Development, and Tourism August 1, 2007 2 DRAFT ANALYSIS AND RECOMMENDATIONS FOR THE HAWAII COUNTY ENERGY SUSTAINABILITY PLAN PRELIMINARY REPORT -MAY 1G, 2007 Historical Future By Michael Davies, Claire Gagne, Ezekiel Hausfather, & Dawn Lippert Project Manager: Jeremiah Johnson, Ph.D. Faculty Advisor: Marian Chertow, Ph.D. Yale University School of Forestry and Environmental Studies Research conducted for The Kohala Center, Kamuela, Hawai°i and the Hawaii County Department of Research and Development Prepared for and Funded by the Hawaii County Council ACKNOWLEDGEMENTS The authors would like to extend our sincere gratitude to the many people who have helped us in the creation of this report. Betsy Cole, Matthews Hamabata, Jan Stenberg, Vanessa Geisman, and Debera Crosson at The Kohala Center, for their continued administrative, intellectual, and advisory support To Noe Noe Wong-Wilson, a founding member of The Kohala Center's Board of Directors, for her support in matters both intellectual and cultural The Hawaii County Council for the vision to launch this project, with special thanks to Chairman Peter Hoffman, and Council Members Robert Jacobson and Angel Pilago for their generous financial support Robert Arrigoni, Jane Testa, and Diane Ley at Hawaii County Research and Development, for their continued insight and support Prof. Marian Chertow at Yale University's School of Forestry and Environmental Studies, for her continued guidance The research team would also like to thank the many people who offered their time and insight through interviews, tours, and emails. Their inclusion in these Acknowledgements does not imply endorsement of this report or the recommendations contained herein. Department of Business, Economic Development & Tourism: Steve Alber, Andrea Gill, Maurice Kaya, John Tantlinger, Howard Wiig Edith Kanake'ole Foundation: Ulu Garmon Energy Management Solutions: Mitchell Johnson Gentry Builders: Robert Kayser, Robert "McKibbin" Mist Hawaii Agriculture Research Center: Mike Poteet Hawaii County Department of Public Works: Randy Riley Hawaii County Department of Transportation: David Hein, Chauncey Wong Yuen Hawaii County Department of Water Supply: Bettina Arrigoni, Earl Fukunaga, and Clyde Young Hawaii County Mass Transit: Tom Brown Hawaii County Planning Department: Susan Gagorik, Brad Kurokawa Hawaii Renewable Energy Alliance: Warren Bollmeier HELLO: Robbie Alm, Pat Moore Hawaii Superferry: Terry O'Halloran Kamehameha Schools: Peter Simmons Kauai County Office of Economic Development: Glenn Sato Pacific Biodiesel: Kelly King PowerLight: John Crouch Puna Geothermal Venture: Mike Kaleikini Rocky Mountain Institute: Lionel Bony, Virginia Lacy, Christina Page, Laura Schewel University of Hawaii at Hilo: Dean Bill Steiner University of Hawaii at Manoa: Makena Coffman, Sarah Goorskey, Prof. Goro Uehara US Biodiesel: Kyle Datta, Coriney Hoffman i TABLE OF CONTENTS List of Abbreviations and Acronyms iv Executive Summary ES-1 1. Public Involvement and Outreach 1.1 Sustainable Energy Plan Stakeholder and Public Meetings 1 1.2 Community Development Planning 1 Kona Community Development Planning Process 2 Puna Community Development Planning Process 3 2. Personnel and Training 2.1 County Employees 4 2.2 Training for Renewable Technology Maintenance and Repair 5 3. Supply -Centralized 3.1 Current Electricity Use and Future Scenarios 6 Historical Electricity Generation and Price 6 Electricity Scenarios 9 3.2 Recommendations for Future Policies 18 Time-of--day Pricing 18 Block Pricing 20 Transmission Line Upgrades 22 Energy Storage: Pumped Storage Hydro with Wind, Batteries 24 Power Plant Retirements 27 Geothermal Power Development 29 Competitive Bidding 33 Avoided Cost 35 Utility Risk Sharing 37 Renewable Portfolio Standard 39 Net Metering 42 IRP-3 43 4. Supply -Decentralized 4.1 Solar Energy 44 Residential Solar Energy 44 Commercial Sector Solar Energy 49 Public Sector Solar Energy 50 Information Dissemination 52 5. Supply -Fuels 5.1 Biofuels 54 Background and Options 54 Economic Incentives 55 Life Cycle Benefits 56 Research and Development 57 5.2 Hydrogen 58 5.3 Ocean Thermal Energy Conversion 5.4 Wave Energy 6. Demand -Building Efficiency 6.1 Residential Housing 63 Residential Building Efficiency 63 Point of Sale Incentives and Information for Efficient Appliances and Lighting 80 ii 6.2 Commercial Buildings 87 6.3 Public Sector 92 7. Demand -Department of Water Supply 7.1 Leak Detection and Repair 93 7.2 Distributed Generation with Microturbines and Photovoltaic Modules 96 7.3 Conservation Strategy 96 8. Demand -Transportation 8.1 Public Sector 98 Mass Transit and Rideshare 98 Idling 102 County Vehicle Fleet 103 Transportation Lighting 106 Aviation and the Superferry 111 8.2 Private Sector 112 Plug-in Hybrid Electric Vehicles 113 Private Automobile Fuel Efficiency 117 9. Potential Cumulative Effects of Recommendations 125 10. Future Research 131 Appendix A. The Supply Side Model A-1 iii LIST OF ABBREVIATIONS AND ACRONYMS AC Air Conditioning ASHRAE American Society of Heating, Refrigerating and Air-Conditioning Engineers B100 100% Biodiesel B2 2%Biodiesel Blend B20 20%Biodiesel Blend B90 90%Biodiesel Blend BCAP Building Codes Assistance Project boe Barrels of Oil Equivalent Btu British Thermal Unit CDP Community Development Plan CFL Compact Fluorescent Light Bulb CT Combustion Turbine DBEDT Department of Business, Economic Development, and Tourism DSM Demand Side Management E10 10% Ethanol Blend E85 85% Ethanol Blend ECAC Energy Cost Adjustment Clause EIA Energy Information Administration, U.S. Department of Energy EPA Environmental Protection Agency FERC Federal Energy Regulatory Commission GWh Gigawatt-hours (one billion watt-hours) HCATT Hawaii Center for Advanced Transportation Technology HECO Hawaii Electric Company (parent company of HELCO) HELCO Hawaii Electric Light Company HEP Hamakua Energy Partners HNEI Hawaii Natural Energy Institute HPwES Home Performance with Energy Star HRS Hawaii Revised Statutes IECC International Energy Conservation Code IESNA Illuminating Engineering Society of North America IPCC Intergovernmental Panel on Climate Change IPP Independent Power Producer IRP Integrated Resource Plan IRP-3 HELCO's Third Integrated Resource Plan kW Kilowatts (one thousand watts) kWh Kilowatt-hour (one thousand watt-hours) LED Light-Emitting Diode LEED Leadership in Energy and Environmental Design MEC Model Energy Code MECO Maui Electric Company MMBtu Million British Thermal Units iv mpg Miles per Gallon MSFO Medium Sulfur Fuel Oil MW Megawatts (one million watts) MWh Megawatt-hours (one million watt-hours) NEG Net Excess Generation NELHA Natural Energy Laboratory of Hawaii Authority NYMEX New York Mercantile Exchange O&M Operations and Maintenance OTEC Ocean Thermal Energy Conversion PAYS Pay As You Save PGV Puna Geothermal Venture PHEV Plug-in Hybrid Electric Vehicle PSH Pumped Storage Hydro PUC Public Utilities Commission PURPA Public Utilities Regulatory Policies Act PV Photovoltaic QF Qualified facility RESNet Residential Energy Services Network RPS Renewable Portfolio Standard RSHG Residential Solar Heat Gain SEER Seasonal Energy Efficiency Ratio SHGC Solar Heat Gain Coefficient SWH Solar Water Heater TOD Time-of--day v The Big Island of Hawaii depends almost entirely on imported sources of fuel for its energy needs. Petroleum products brought in from the mainland United States or foreign countries currently satisfy the fuel demand for over 70% of electricity generation and virtually all transportation needs. Growth in Hawaii Island's tourism, residential, and transportation sectors continues to drive increases in energy demand. Fluctuations and disruptions in the world energy market create serious financial and supply vulnerabilities for Hawaii County. Rising prices for crude oil on the global market have contributed significantly to placing the Island's electricity prices and gasoline prices consistently among the highest in the nation. This supply structure sends millions of dollars out of the local economy each year. In addition, the heavy dependence on imports exposes the County energy supply to the fluctuations and instability of the global energy market. This dependence on fossil fuels is also linked to the large environmental impact of the energy sector, which releases thousands of tons of greenhouse gases and other pollutants into the atmosphere annually. In September, 2006, the Hawaii County Council issued Resolution 419-06, which provided funding for the creation of an energy sustainability plan. The goals of this Resolution included "The identification of opportunities and incentives for Hawaii County to enhance and maximize energy self-sufficiency and conservation and to employ renewable and alternative power resources and the use of biofuels within County facilities and Hawaii Island." The report contained herein, Analysis and Recommendations for the Hawaii County Energy Sustainability Plan, represents the preliminary findings to support this County goal. In 2005, The Kohala Center and the Yale University School of Forestry and Environmental Studies launched a program to create a roadmap for sustainability, culminating in the May 2006 publications of the Hawai `i County Energy Baseline Analysis. t . The baseline report Enemy sn~ply - t6te., - 8~d characterized the County's energy supply and demand, soutC68 of,elfelgy a?~P the local, state, and federal energy regulatory structure, meetdemand(e.g., so~,:al) and the social and cultural characteristics of Hawaii as Energy dcmnnd - the at4~3t1A1 they relate to energy. This report also served as a key of E~rBy pegtiiUed fA meet the data source for the analysis contained herein to support service needs of ead usefs the County Resolution. As part of this effort, the energy system was examined holistically, including electricity generation and transportation fuel use, with the goal of identifying lowest cost, technologically feasible opportunities that can be employed in the near term. Opportunities were identified to maximize energy efficiency and conservation as well as to develop economically viable renewable generation. To this end, sixty-eight ' Available online at: http://]eaming.kohalacenter.org/resource/resmgr/pdf/hcbea.pdf Draft Executive Summary - 1 recommendations to the County were developed and are presented and discussed in this report. The broad focal areas of this report include energy efficiency and increased energy generation from renewable sources. Energy efficiency improvements relate to buildings, transportation, and water use. Renewable generation categories include the use of biofuels in transportation, distributed generation using solar technologies, and large scale electricity production options for the utility (HELLO) such as geothermal power, wind farms, Energy efficiency -reduce and biofuel use in power plants. For each of these demand from existing services areas of focus, in addition to several smaller without affecting the type or categories, recommendations were crafted to quality of that service support the County's goals of maximizing efficiency and renewable generation. The group or groups capable of implementation were identified and the potential impacts on the energy system were characterized through 2030. In order to compare the benefits of the different options, it is necessary to evaluate the primary energy use. For example, when discussing a reduction in electricity use caused by an efficiency measure, one should quantify the energy in the fuel that would have gone to make the electricity (i.e., the primary energy). Primary energy -energy If you install an efficient light bulb and reduce your resources as extracted from nature electricity use by 30 kWh over the course of a year, you are actually reducing primary energy use (i.e., the energy contained in the fuel at the power plants) by three to four times that amount due to production and transmission losses of electricity.Z The cumulative effect of the recommendations contained in this report is expressed in Figures ES-I, ES-2, and ES-3 below. These figures compare historic energy use and future energy use under two scenarios; (1) a business as usual scenario (Figure ES-1) where energy in the future is generated and consumed in the same manner as in the past and (2) a more sustainable scenario (Figure ES-2) that implements those recommendations presented in this report. In both scenarios, energy consumption would increase due to increased individual demand, population rise, and additional tourism. However the amount of energy increase and the manner in which the energy is generated differ dramatically. Figure ES-3 provides a breakdown of the efficiency measures and technologies implemented to provide the results shown in Figure ES-2. s For the purpose of this study, the energy content of gasoline, diesel, and the fuels used in power plants are assumed to be equal to their primary energy, despite having undergone processing after extraction. Draft Executive Summary - 2 Figure ES-1 below shows projected energy consumption increases and the means of generation unti12030 if Hawaii County were to continue supplying and consuming energy the way it does today (business as usual). As shown, energy demand would continue to increase. A portion of energy generation would continue to be from renewables (mainly geothermal in addition to some wind); however, imported fossil fuels would remain the backbone of the energy supply. Figure ES-2 below shows the cumulative effect of the recommendations presented in the report. As shown, both efficiency measures and renewable generation play an important role in increasing overall energy independence. The efficiency wedge (in green) illustrates the potential to reduce demand, while the renewable generation wedge (in blue) represents opportunities to employ alternative energy generated on the Big Island to reduce the use of imported fossil fuels. Both the green and blue wedges are made up of numerous initiatives that are presented in this report. Whereas each recommendation may contribute a modest improvement on its own, the aggregate impact of the various measures on the energy system would be tremendous. This illustrates a central conclusion of this report that energy sustainability will be achieved as the result of many efficiency measures and more diversified generation than is currently the case. Figure ES-3 below shows the contribution of each energy-saving measure and renewable generation summarized in Figure ES-2. The efficiency measures (green wedge in Figure ES-2) are broken down into their different contributions. These include such measures as reducing energy losses through improved electrical transmission, better energy efficiency in buildings, more fuel efficient transportation options, as well as other measures. The renewable generation measures (blue wedge in ES-2) also are broken down into increased electrical generation from greater geothermal and wind, and from increased use of biofuels for vehicular transportation. A summary of the assumptions that support this mode] are provided in Table 9.1 and each contributing factor is discussed in greater detail throughout the text. Draft Executive Summary - 3 50 _ _ Historical Future 45 40 T 7 m 35 ~ ¦ Renewable G 30 Electricty 25 ¦Aviation Fuel m c 20 ¦Fossil Liquid W Fuel m 15 ~ ®Fossil ri 10 Electricity 5 0 ~ ~ ~ ONJ ~ O O O N O N N N W m m D) D) O O O O O O O O ~ ~ ~ N N N N N N N N Figure ES-1: Projected energy supply fuel sources using business as usual scenario 50 - - - - Historical Future 45 40 r 35 m 30 ¦ Efficiency 25 ®Renewable Generation 20 ¦Fossil Fuel ICI r I'~ 15 io 5 0 o~ ~ ~ ~ ~ ~ 8m _pN Apo po a m N N N N N N N Figure ES-2: Estimated potential for all efficiency and renewable generation recommendations in the proposed Hawaii Island Sustainable Energy Plan Draft Executive Summary - 4 ¦Transmission 50 Historical Future ¦New residential i building effciency 45 ¦Watereffciency T 40 ?Commercial& j public efficiency ~ ¦ Mass transit m 35 ¦Auto efficiency c O $0 OCFL-existing homes ¦PHEV net reduction Y 25 pt ¦PHEV renewable iv electricity c 20 ¦ Solar water heaters W -existing homes ¦ Distributed m 15 photovoltaic E ?Biofuels in ground 10 transport d ©Biofuels in power pplants 5 ¦Renewable electricity ¦Aviation fuel 0o v oo N co o v ep N o o a ro ¦Fossil ground °D °D oD Q) 01 O O O N N N tranSPOR , O O O O O N N N N N N N N ~FOSSIi eIBCtflClly r ~ r r Figure ES-3: Primary energy use in Hawaii County with future energy efficiency and renewable energy actions Of the various options presented to the County, those with the most immediate impact include: • Improving building design and performance through codes and incentives, and increasing the use of technologies such as solar water heaters and compact fluorescent light bulbs; • Improving the fuel efficiency of vehicles; • Increasing the use of mass transit; • Retiring the Shipman and Puna steam power plants, replacing them with geothermal generation, and adding pumped storage hydro coupled with wind power. Based on the aggressive scenario represented in Figure ES-3, in 2030, all efficiency measures could cover 29% of the expected primary energy use and renewable generation could cover 42%, leaving approximately 29% of primary energy demand to be met using fossil fuels. This report describes the specific actions that can be taken to achieve the County's goals, beginning with energy efficiency and followed by renewable generation. The overarching goals should be to use as little energy as possible and to meet any remaining demand with the energy generated from the cleanest sources Drag Executive Summary - 5 EnerQV Efficiency of BuildinEs A combination of regulations and incentives for builders and customers represents the optimal strategy for improving the energy efficiency of buildings. The current Model Energy Code, which provides voluntary standards for energy efficiency in residential buildings, is out of date, exempts many new residential homes, and does little to encourage energy efficient design. The County should end the exemption status for these residential buildings. Specific energy savings requirements can be incorporated into the residential code, such as minimization of roof heat gain, requirements for wall insulation, low-emissivity windows and doors, passive envelope cooling techniques (e.g., use of overhangs), and more efficient air conditioning units. Additions and Model Energy Code -energy alterations to existing homes should be subject to efficiency criteria for new residential these requirements. In addition, the code should be and commercial buildings and changed so that any single-structure residential additions to existing buildings developments in excess of 6,000 square feet are subject to the more stringent commercial building requirements of the Model Energy Code. Beyond regulations, there are many incentives that can encourage builders to incorporate energy efficiency measures. In addition to existing state and federal tax credits and utility rebates, the County can promote efficiency through an environmental labeling system for homes, assisting builders in paying for the certifications, streamlining the permitting process for efficient buildings, reducing the efficiency verification backlog by hiring athird-party verifier, incentivising the Hawaii BuiltGreen program, and establishing a County energy efficiency tax credit. While the average home in Hawaii County uses Building envelope -the "shell" of approximately 600 kWh of electricity per month, one the structure (i.e., the walls, roof, contractor on Oahu constructs energy efficient doors, and windows) homes that use 60% less energy with upfront construction costs comparable to conventional home prices. These homes emphasize building envelope design to improve energy efficiency and feature such technologies as solar water heaters, compact fluorescent lighting, and cool roofs. If the measures above are implemented, and new homes in Hawaii County realize this 60% reduction, in 2030 an estimated 1.2 trillion Btu per year of primary energy would be saved, which is the energy equivalent of 9 million gallons of diesel per year. Existing residential homes would likely be exempt from any changes to the Model Energy Code. There are still measures that homeowners can take to dramatically reduce their energy usage and cost. Switching from incandescent lighting to compact fluorescent light bulbs is a simple action with significant impact. Using only a quarter of the electricity and lasting considerably longer than incandescent bulbs, this technology pays for itself in reduced energy bills in about two months and can save the homeowner hundreds of dollazs per year. The main obstacle to widespread use of this technology is Draft Executive Summary - 6 lack of consumer information. To meet its goals of energy efficiency, the County should aggressively promote the use of compact fluorescent light bulbs and ensure that price- reducing coupons are offered as part of the new third-party demand side management program beginning in 2009. The County should prioritize adopting measures that lead consumers to switch to this technology. If 2,000 homes per year switch to this technology until a total of 32,000 homes switch, the annual primary energy demand reduction would be 300 billion Btu per year (i.e., 2 million gallons of diesel). Another technology appropriate for existing homes is "Pay Ai,! Xou Save" - a program the solar water heater. With a $1,000 rebate from the that eliminates upfront cysts of utility, a 35% tax credit from the State, and a 30% tax honp~,~pe;gy/ systems by allowing credit from the federal government, the home owner consuplEls to pay fot` the system ends up paying only a fraction of the system cost through their electricity bill upfront. Although the remaining upfront cost remains significant, the investment pays for itself in the form of energy savings in as little as three years. Out-of-pocket costs can be eliminated when the Public Utility Commission (PUC) institutes the "Pay As You Save" (PAYS) program that would allow homeowners to make monthly payments toward their system that are incorporated into their monthly utility bill. This should greatly reduce the financial barrier for those who do not have the funds needed to pay for the system. It is recommended that the County heavily promote this technology and the PAYS program upon PUC Public Benefit Fund - a 1ttlSling implementation. An online calculator could show mechanism that will 6e used to consumers that solar water heating can reduce their pay for demand side management yearly electricity expenses by up to $800, It is also activities recommended that the Public Benefit Fund increase the rebate from $1,000 to $1,500. If 3.5% of existing homes add a solar water heater every year unti12030, 1.6 trillion Btu of primary energy (i.e., 12 million gallons of diesel) would be saved.3 The Energy Star program certifies energy efficient household appliances, providing consumers with information on energy use. Unfortunately, the "EnergySaver" guides that come with appliances at retail stores use the much lower mainland electricity prices to estimate annual energy costs and savings. To inform residents of the true energy costs of appliances, the County can create a Hawaii Island EnergySaver guide using local electricity rates and encouraging the purchase of energy efficient appliances. The quickest pay back for the cost premium of Energy Star appliances in Hawaii County occurs with air conditioners, followed by refrigerators, dish washers, and then clothes washers. Through the County or the Public Benefit Fund, point of sale incentives can be created which decrease the cost premium of efficient appliances, starting with air conditioners. It is the responsibility of retailers to use the local EnergySaver information and promote efficient models, while consumers should purchase these products. ' This only includes the contribution of solar water heaters on existing buildings. The contribution of solar water heaters on new buildings is included in the section on new residential homes. Draft Executive Summary - 7 Improving the efficiency of commercial and public sector buildings is also a key part of achieving the County's goals. The commercial code can be updated to reflect the new standards of ASHRAE/IESNA 90.1-2004. Such updates also could include "cool roof' requirements, rainwater harvesting, and life cycle costing for large projects. County incentives can spur efficiency, including establishing a labeling system for efficient projects, establishing financial incentives for building performance, requiring commissioning agents for all large commercial construction projects, encouraging the Hawaii BuiltGreen program, and providing rewards for certifying building operators in energy efficiency. By requiring high standards for energy efficiency in County-owned and financed buildings, the County would be leading by example. Requiring Energy Star certification of County buildings would save in energy costs, demonstrate the County's commitment to efficiency, and develop local expertise in constructing energy efficient buildings. Between the commercial and public sector buildings, if a 1.5% annual decrease in energy demand is achieved, up to a total of 21% reduction, the annual efficiency gains would be 2.1 trillion Btu of primary energy (i.e., 16 million gallons of diesel). EnerBV Efficiency in Transuortation Improving the efficiency of the transportation sector can be achieved by increasing fuel efficiency of the Feebates - arevenue-neutral car and light truck fleet with feebates, increasing the program which charges fees for use of mass transit rideshare, bicycles, and, when the inefficient automobiles and awards technology becomes available, promoting plug-in rebates for more efficient models hybrid vehicles. To spur automotive fuel efficiency, the County or State can initiate a strong feebate program in which automobiles are assessed a fee or given a rebate depending on their fuel efficiency. The program can be revenue neutral, with fee revenue paying for rebates and modest program administration charges. This would create no net financial burden on residents yet guide automobile purchasing practices towards more efficient vehicles. A feebate program that begins with a dual pivot point at 23 miles per gallon for trucks/SUVs and increases to 28 miles per Pivot point -the set point at which gallon for cars by 2030 would produce automobiles with higher fuel tremendous results. Taking into account the efficiencies receive a rebate and those time for fleet turnover, this would increase the with lower efficiencies pay a fee average fuel efficiency of cars and light trucks from 23 miles per gallon to 30 miles per gallon by 2030, reducing transportation fuel use by Take back effect -the phenomenon rougholy 25 million gallons of gasoline per year. where energy efficiency improvements A 10 /o take back effect was assumed as lead to other expenditures that use energy efficiency improvements typically additional energy; In the case of result in slightly increased consumption. To efficient automobiles, greater fuel demonstrate its commitment to automotive fuel efficiency is shown to lead to an efficiency, the County can lead by example and increase in miles driven require that new purchases for its vehicle fleet Draft Executive Summary - 8 meet the energy efficiency standards set forth in Hawaii Revised Statutes § 103D-412 for State vehicle fleets. The County should also require its heavy-duty vehicle fleets to meet Alternative Fuel Standards such as the use of B20 in all diesel-powered vehicles. The increase in use of mass transit in Hawaii County over the past two years is a great success story. Ridership has nearly doubled since Hawaii Mass Transit implemented the "Hele-on" free bus policy. Increased usage is saving consumers money on fuel and car maintenance, decreasing traffic congestion, creating safer roads, and decreasing demand for automotive fuel. In addition, Hawaii Mass Transit is launching a rideshare program to encourage carpooling. To expand on this success, the County is actively promoting bus use and rideshare in conjunction with a marketing class from the University of Hawaii at Hilo. By providing more buses and more bus routes, the County can continue this rapid growth in public transportation. If 20% annual increases in ridership occur through 2015, followed by annual growth of 5% through 2030, the energy savings of these programs would tota12.2 trillion Btu or roughly 19 million gallons of gasoline per year. Where appropriate, the County should require spacing for bicycle lanes during the construction of new roads or improvements on existing roadways. Although bicycle lanes are typically most effective in dense urban areas, towns such as Kona, Hilo, and Waimea have sufficiently compact downtown areas to support the use of bicycles. Pending the popularity of bicycle use in these areas, the County should be prepared to offer bicycle rack areas for residents to lock their bikes while riding in and around town. Due to the distance and terrain between the larger town centers on the island, high demand for bike lanes on these highways is not anticipated. However, the County should ensure that safe bike paths exist wherever possible for any bikers who may wish to travel longer distances. An additional consideration is to purchase cross-island buses with bicycle racks so that riders can use a combination of bicycle and public transportation to travel around the island; such bus models are readily available. Plug-in hybrid electric vehicles are an emerging vehicle technology capable of operating as an electric vehicle (on an electric charge), as a typical fossil-fuel engine (on motor fuel), or as a hybrid electric vehicle (on a combination of electricity and motor fuel). When charged electrically, these vehicles simply "plug-in" to a wall outlet like another appliance. General Motors recently announced its intention to produce plug-in hybrids in passenger car and SUV models starting in 2010 and other companies are expected to pursue similar paths. Since these cars get much of their energy from the electric grid, the environmental performance of their operation depends on the fuel mix that goes into electricity production. In Hawaii County, aplug-in hybrid using electricity from the current fuel mix would use fossil fuels on the grid at a rate of 41 miles per gallon of gasoline equivalent. By increasing the share of renewable energy on the grid, a more distinct advantage can be created. Draft Executive Summary - 9 Since these vehicles would be using electricity, the grid must be able to accommodate their charging requirements. An essential tool in electricity planning is the load curve. Since the utility cannot store electricity, the amount of Load curve - a chart showing electricity generated at any given time must match the the amount of electricity that amount demanded by consumers. When residents customers use over time, which arrive home after work, they tend to run many of their is essential for planning appliances, creating a daily peak in demand around 7:00 pm. After residents go to sleep, electricity demand can drop by over 50%. The utility must have adequate capacity to generate enough electricity to cover these peaks, even if they last for a only few minutes; apart from the utility's obvious need to provide satisfactory customer service, the sensitivity of electricity grids means that an inability to meet peak demand could result in brownouts or rolling blackouts. If the plug-in hybrids are charged during peak hours (i.e., immediately after work), this increases peak demand and requires that the utility utilize its most expensive generating units. Not only would an increase in peak demand from plug-in hybrids represent an inefficient use of electricity, it is also expensive for the customer and produces higher than average pollution. Owners of these cars could avoid contributing to this peak demand problem by plugging them in Time-of-day pt3cing -charging during off-peak times. This can be encouraged electricity users more doting peak through a strong time-of--day pricing system, which hours and less during off-peak hours charges customers more for electricity used during peak hours and less for electricity used during off-peak hours, a structure that closely reflects the cost of energy to the utility. Atime-of--day pricing scheme is currently being launched for up to 300 homes in the County. If the utility is able to successfully manage charging these vehicles, plug-in hybrids could prove to be a tremendous source of revenue for the utility and allow it to use excess nighttime capacity. Such a charging structure also provides load curve benefits by making demand more consistent throughout the day and night. Given the sensitivity of electricity grids to demand fluctuations, a more balanced load curve also benefits electricity transmission. Another solution to the potential load problem associated with plug-in hybrids comes in the form of "Vehicle to Grid" or V2G technology, which is currently in development for use with electric vehicles such as PHEVs. Using V2G, the batteries in PHEVs could essentially serve as small, mobile electricity storage and supply systems for the grid. Instead of presenting a potential load curve problem, PHEVs would offer a compelling partial-solution to load curve problems like electricity peaks and valleys. V2G is also envisioned as acting as a buffer to the intermittency of certain forms of renewable power like wind, for which an unpredictable supply represents a barrier to use. Capable of capturing power generated by wind energy, V2G could store this power for the grid. When these automobiles become available, the County can create incentives to launch a pilot program on the island. If this technology proves viable, and if by 2030 40,000 of the cars on the island are plug-in hybrids, the net efficiency gains from these vehicles would be 1.0 trillion Btu or 9 million gallons of gasoline per year, assuming that 74% of Draft Executive Summary - ] 0 miles driven are on an electric charge and there is a take back effect of 10%. These fuel reduction estimates do not account for promising advancements in PHEV technology that may increase the battery range to 100 miles per charge and reduce expected fuel demand through mile per gallon ratings of more 100 mpg. In absence of V2G technology, the PUC and the utility should work to create a strong time-of--day pricing scheme to help make plug-in hybrid operation significantly less expensive than traditional automobiles. Although V2G would make PHEVs particularly compelling for Hawaii County, a strong time of day pricing scheme would still go far to ameliorate potential pitfalls yet capture fuel reduction and load curve benefits. EnerEV Efficiency of the Water System With most of the County's water supply coming from ground water that requires extensive pumping, water usage is linked to energy GenbTating pressure reducing use. In fact, the Department of Water Supply is the vibe an apparatus that captures largest consu mer of electricity in the County, energy from the pressure in the representing 5 /o of total use. There are five main water system that must be reduced areas for potential improvement: repair the most before distribution td-the Customers extensive leaks in the water system, create a water conservation policy, develop more storage capacity to prevent the need for peak pumping, institute a pump system maintenance and efficiency program, and install generating pressure reducing valves. The Hilo area water system needs extensive leak repairs; approximately 29% of water produced does not make it to the end user. In 1999, the Department of Water Supply launched a program to identify leaks and estimate the cost of their repair and found that the median pay back time is less than one year. The repairs that have been conducted have been largely successful, but the Department lacks the logistical support to fully carry out the repairs. With logistical support from the County, these repairs can be executed and the Department of Water Supply can reduce electricity usage by 5 million kWh per year, or the equivalent primary energy of 500,000 gallons of diesel. A comprehensive water conservation policy would further reduce water and energy demand. Such actions could include rainwater harvesting on large commercial properties, installing water re-use systems, creating a progressive pricing scheme that rewards water efficiency, and creating point-of--sale incentives for water efficient appliances. If a conservation policy were to reduce water demand by 20%, the primary energy savings would be 270 billion Btu in 2030 (i.e., 2 million gallons of diesel). The number of viable sites for generating pressure reducing valves needs to be closely examined by the Department of Water Supply and these valves should be installed where cost effective. If it is found that two of these units can be installed each year, each rated at 40 kW and achieving 75% utilization, 150 billion Btu of primary energy (1 million gallons of diesel) would no longer need to be taken from the grid each year by 2030. Draft Executive Summary - 11 Energy Efficiency through Reduced Electric Transmission Losses With much of the electric generation capacity on the east side of the island and a large and increasing demand in the west, adequate cross-island transmission is essential to grid stability and the minimization of line losses. Current losses total between eight and nine percent of generation; improved transmission lines would cut these losses to less than seven percent. Plans are already underway for the utility to improve three of these lines, alleviating some of the concerns for overcrowding and reducing line losses. These upgrades would reduce generation fuel by an estimated 1.8 trillion Btu of primary energy in 2030 annually (i.e., 14 million gallons of diesel). Renewable Electricity Production by the Utility In 2006, over 76% of electricity generation in Hawai `i County was from petroleum- based fuels (diesel, medium sulfur fuel oil, and naphtha), 17% was from geothermal at Puna Geothermal Venture, 5% was from hydropower, and 2% was from wind power. The share of generation from wind power would increase dramatically with the two new wind farm installations, likely to over ] 0% of generation. The utility must plan for new generation capacity to meet expected peak demand while creating a system that also can effectively operate at the low off-peak levels of demand. Since the island is an isolated grid, no safety net exists where the utility can buy and sell electricity with other regions. The penalty for failing to meet demand is severe: blackouts and system damage can occur. All forms of generation are not created equal and some possess distinct advantages over others. It is helpful to segment the different types of generation in the County into five groups: 1. Non-regulating baseload plants are Baseload plants- power plants intended to units that are intended to be run all of be run all of the time except during repairs the time, except during repairs. "Non- Intermediate or cycling plants -power regulating" refers to their inability to plants intended to run some of the time adapt their output to maintain frequency pealdng plants -power plants that and voltage consistency. The generally run only when there is high geothermal facility is the only unit in demand this category. Intermittent sources -power generation 2. Regulating baseload plants aze also that is variable and determined by natural intended to run all or most of the time, sources such as wind but these units are equipped with automatic generation controls to rapidly allow for adjustment to manage frequency and voltage. As these plants are most efficient when operating all day, it is desirable to have baseload generation that does not exceed minimum demand. The Puna and Hill plants, which run on a fuel called MSFO, are examples of regulating baseload plants. 3. Intermediate or cycling plants fill in the gaps between baseload generation and peaking plants, running for the portion of the day when demand is higher than the minimum load and compensating for extra baseload or peak demand. The Puna Draft Executive Summary - 12 CT-3, Keahole CT2, CT4, CTS, CT7, and Shipman plants are all cycling/intermediate generators. 4. Peaking plants provide power for short periods of the day when demand is the highest. Kanoelehua CT-1 is a peaking plant. 5. Intermittent sources, which are variable and depend on natural conditions, include photovoltaic power, wind power, and some forms of hydropower. Two wind farms currently serve the island, the Upolu farm located on Upolu Point near Hawi and the Apollo farm located in South Point. A model was created for this report to assess the feasibility of meeting the County's renewable energy goals by incorporating more renewable generation in the electrical grid. Four scenarios were examined: three were taken directly from the utility's Integrated Resource Planning (IRP) process (the "Baseline," the "Preferred Option," and "Maximum Renewables"). A fourth scenario entitled the "Energy Sustainability Plan" was generated for this study and examines the effect of plant retirements. All four of these scenarios were assessed in concert to determine how the quantification of energy generation by source and total scenario cost compare. The IRP process is the mechanism by which the utility gains approval for planned additions and retirements to its generating capacity. Nearing the completion of the third planning cycle (IRP-3), the Preferred Plan chosen by the utility involves the addition of a combined Integcsted Resources Planniug- cycle unit (i.e., an efficiency improvement) at the the mechanism by which the utility Keahole facility in 2009, followed by 10 MW of gains approval for planned wind power in 20164 and 25 MW of geothermal in additions and retiremetts to its 2022. In the IRP-3, there are no listed plans for generating capacity power plant retirements. A comparison of the four scenarios was performed for this report and a summary is presented below in Figure ES-4. The figure presents a timeline of action under the three plans outlined in the IRP as well as for the Energy Sustainability Plan that was developed for this report. ° The IRP-3 preferred plan actually calls for 37 GWh per year of an intermittent source in 2016, which was modeled as 10 MW of wind power. Drag Executive Summary - 13 .i Baseline 18 10 26.7 Max Renewables 18 1 1 1 12.5 40 Wind Preferred 30 PSH Option 1s 1u 25 Energy Sustainability 20 10 4o win 10 Plan 1 2010 2015 3o PSH 2020 2025 Retire Puna • Steam Recovery • Wind Steam, Shipman • Geothermal • Coal O Photovoltaic Solar • Wmd with Pumped All Units MW Storage Hydro Figure ES-4. Comparison of Energy Generation Scenarios In the Energy Sustainability Plan scenario, two of the least efficient fossil fuel plants (the Puna baseload plant and the Shipman intermediate plant) are retired as soon as possible. This generation capacity is replaced by increasing geothermal production at Puna Geothermal Venture by 20 MW, equipped with automatic generation controls to allow for regulation. Puna Geothermal Venture, which currently has 30 MW of capacity, is permitted for an additiona130 MW at its existing site, for a total of up to 60 MW. Of the 20 MW increase, up to 8 MW could be met with a steam recovery unit, which would avoid the need to drill additional wells. In 2014, the scenario calls for increasing geothermal output by an additional 10 MW. Five years later, a 40 MW wind farm coupled with a 30 MW pumped hydro storage is added. ,~':i' tNk ~ ~ lr ~ ~ a i}~ r w The use of pumped storage hydro system in conjunction r' ~ ~ ~ ~"~"a,.~' with an intermittent energy source like wind can ' ` - effeotively alleviate the intermittency concerns V~ associated with renewable power, reducing the share of the grid capacity from intermittent sources to less than ~ the IRP preferred plan. This scenario also calls for 37 GWh per year of an intermittent renewable (possibly ~ ~~~t ~ wind) in 2022. To match the IRP scenarios, the Energy Sustainability Plan scenario goes until 2025, with the minimum and maximum loads of the Energy Sustainability Plan scenario and the IRP Preferred Plan being quite similar. Draft Executive Summary - 14 Since the other options in this report look at the effects of action in 2030, to allow for comparisons in 2030, it is also assumed that 20 MW of firm renewable generation is added in 2026. If this Energy Sustainability Plan scenario were implemented, renewable generation would replace 12 trillion Btu of fossil fuel primary energy in 2030, the equivalent of 94 million gallons of diesel per year. This is more than double the expected fossil fuel displacement from renewable utility generation expected to occur in 2007, which is 5.3 trillion Btu of primary energy. There are five essential factors that must be considered when evaluating the cost of each of these scenarios: 1. Base savings -The current difference between Independent poweC what HELCO pays for its own power and what it pCOducer -privately owned pays its Independent Power Producers. power plants 2. Efficiency gains from retirement - By retiring the least efficient fossil fuel plants, the remaining (more efficient) plants decrease the average unit cost of power. 3. Unlinking avoided cost savings -Avoided costs paid to independent power producers are currently linked to HELCO's fuel costs. This has the perverse effect of raising the cost of renewable energy production (e.g., wind) to the high cost of oil and eliminates the financial benefits of cheap renewable power for the consumers. Payments for renewables should be de-linked from oil prices. 4. The future cost of greenhouse gases - In light of the State Legislature recently passing the Global Avoided Cost -the tote that Warming Solutions Act and utilities across the the utility must pay qualified nation funding reductions in the greenhouse gas independent l~a'~ Prodttcez$, emissions, it is becoming increasingly likely that a which is based on vrliat tii price would be put on such emissions in the near "avoid" paying by nOt future. producing it themselves 5. Energy storage costs -This factor captures the cost of energy storage, including pumped storage hydro, which allows for increased use of intermittent renewables. Using Energy Information Administration oil price estimates, it was found that the net present value of the Energy Sustainability Plan scenario resulted in a savings of $230 million over the baseline scenario presented in the I1tP-3.5 By contrast, HELCO's IRP-3 Preferred Plan results in a net present value savings of $33 million over the base case. The Energy Sustainability Plan scenario cost savings are segmented as follows: The base and efficiency savings minus the storage costs totaled $38 million. Unlinking the avoided costs resulted in the largest savings: $129 million. Assuming a cost of carbon at $20 per ton of COz, $63 million in the cost of carbon would be saved over the IRP-3 base case. Several actions can be taken to achieve the benefit of the Energy Sustainability Plan scenario: 1. The County, PUC, and the community can convince the utility that 5 Assuming a 5% discount rate. Draft Executive Summary - 15 accelerated renewable generation should be pursued. 2. The PUC can delink avoided cost and renewable generation through a strong competitive Competitive bidding - bidding process, with the effect of driving down costs and the process of soliciting Passing the savings on to the consumer. 3. The PUC can proposals for a project and strengthen the Renewable Portfolio Standard by removing choosing the best proposal efficiency from the calculation in order to focus on increasing renewable generation. 4. The PUC can implement utility risk sharing for oil prices, rather than passing through all increases in oil price to the public, and mandate that Renewable Portfolio consistent oil forecasts are used for setting the base rate and Standard -the law the IRP process. 5. Since greenhouse gas regulations seem requiring each electric inevitable, the utility should include the cost of releasing utility to meet minimum greenhouse gases in its planning, thus including the percentages of sales of expected financial and environmental advantages of an renewable energy accelerated renewables plan. Biofuel Use in Power Plants and Transportation There aze numerous options in the production of biofuels. Ethanol can be produced from sugar crops or through emerging processes for cellulosic materials. Biodiesel can be produced from oil crops, from waste oil including used cooking oil, and from algae. In addition to the production of these liquid fuels, biomass can be directly combusted to produce electricity from steam turbines, which includes waste-to-energy facilities. Liquid biofuels can be utilized for transportation and, in some cases, as substitutes for petroleum-based fuel in power plants. A study by the Hawaii Agriculture Research Center highlighted the tremendous potential for biofuels in the State of Hawai `i, estimating that over 100 million gallons of Biodiesel could be produced per year in the state. Parties who are interested in developing Biofuel in Hawaii County cite several key obstacles: 1. For energy crop production on the island, agricultural and mill pilot projects are needed to prove crop yield and production costs to investors. 2. Long term purchase contracts aze needed to mitigate some of the risk of the investment. 3. The creation of energy zones would facilitate the agricultural and production processes. In efforts to meet its goal to increase renewable generation, the County can help procure the funds for the pilot projects, encourage the utility to enter purchasing agreements for biofuels, and create energy zones to facilitate development. The State created an Alternative Fuel Standard to facilitate the development of alternative fuels by having an escalating share of highway fuels provided by alternative fuels, starting with 10% in 2010 Alternat[ve Fnel Standard - and increasing to 20% by 2020. The Alternative Fuel a state law requiring the Standard is a positive step in creating the market for biofizels. development and use of alternative fuels The benefits and costs of different biofuels and different production schemes can vary widely. To best understand the net energy yield, the pollutants released, and the additional energy security associated with the various Draft Executive Summary - 16 strategies, the County could fund a life cycle analysis to coincide with the pilot projects. This study could then be used to further refine the Alternative Fuel Standard and Renewable Portfolio Standard by weighting the biofuels according to net benefits. In June 2007, HECO announced that it and its subsidiaries would commence steps to transition its existing plants from petroleum diesel to biodiesel. HECO and its partner in this venture, B1ueEarth Biofuels LLC, would import palm oil crops with a provision to use locally grown feedstocks when available. This plan provides significant encouragement to grow the market for locally grown and produced biodiesel. HECO stated that a key component of its plan is to encourage the development of locally grown biofuels feedstock to provide the fuel for their operations. The County of Hawaii would be limited in its ability to influence the development of this industry both in the state and on the Big Island. State agencies, HECO, and large private investment would largely dictate events. However, the growth of a biofuels industry in the State of Hawaii holds both tremendous economic promise and also significant potential pitfalls. The Big Island has approximately 1.2 million acres of land classified as agricultural, of which approximately 830,000 acres is under use in farming operations. Approximately 100,000 acres of the remaining land lies fallow. There is evident potential for biofuels production on the Big Island. This would also bring jobs, not only to growers but also in the extraction and refining areas of biofuel production. However, a large and new industry also would bring pressures to natural resources and to existing infrastructure. There are several steps the County should consider in response to this new industry: 1. The County should encourage development of this industry by making available County lands for pilot projects; 2. The County also should carefully examine capital investment need for additional infrastructure requirements. New industries, the state agencies, and the utilities should be required to contribute to the improvement of the facilities and infrastructure upon which they will rely; 3. The County should examine the full range of costs and benefits to the County of having biofuels feedstocks grown on the island; and 4. The County should provide assistance to local growers. The utility has not fully developed its plans for its proposed use of biodiesel. In order to meet its Renewable Portfolio Standard goals, the utility could opt to use biodiesel in its diesel generators and turbines, as well as investigate the potential for blending ethanol with naphtha. If the utility agrees to use 2.3 trillion Btu of biofuels per year by 2030, and the transportation sector (including the Superfeny) uses 3.7 trillion Btu per year, 12.5% of the expected primary energy would be met by biofuels. If the biofuel of choice was biodiesel, approximately 46 million gallons per year would need to be produced, requiring 115,000 acres of agricultural land with yields of 400 gallons per acre. Such a yield may be representative of kukui as the energy crop of choice, with higher yields attainable by palm oi] and algae. If ethanol is utilized, 58 million gallons would be needed to meet the energy requirement. The amount of land needed to produce this much ethanol is highly dependent on the type of energy crop chosen (e.g., cellulosic or sugar) and the yields that would be determined through the pilot plot study. Likely, to meet the total demand for biofuel, some combination biodiesel and ethanol would be produced, Draft Executive Summary - 17 determined by market conditions and the ability for the agricultural production and processing to reduce costs and maximize efficiencies. Distributed Generation of Photovoltaic Power Solar power using photovoltaic technology currently represents a small portion of total electricity generation. The global market for photovoltaic systems is rapidly growing and the efficiency of solar modules continues to increase. Photovoltaic systems are typically used as Distributed generation - distributed generation, as opposed to a form of non-utility electrical power centralized power generation. When distributed generated by small sources such generation units are attached to the electrical grid, as PV panels, microwind turbines, they have the potential to sell excess energy back to and some cogeneration systems the grid. To facilitate this, laws currently require the utility to allow systems up to SOkW to use net metering, with cumulative net metering agreements kept below 0.5% of the utility's peak demand, although exemptions can be made on a case-by-case basis to allow net metering for Net metering -deducting systems that are larger than 50 kW. Peak demand is distributed generation approximately 200 MW. Cumulative net metering contributions to the grid from therefore is set at approximately 1MW. Increasing the grid electricity usage net metering standards would allow more photovoltaic installations to sell power to the grid. This must be balanced with the need for the utility to utilize effectively this intermittent generation. Off-grid systems that do not wish to pursue a grid connection are not limited by net metering laws. State tax credits exist for photovoltaic systems, covering up to 35% of the system cost. This can lead to payback times of less than two years for commercial units and up to eight years for residential installations. A Pay As You Save program for residential photovoltaic systems would eliminate the upfront cost to homeowners and allow them to pay for the system over time. Due to the inability for County buildings to claim the State tax credit and accelerated depreciation, the payback time for the County increases to 14 years. The County can, however, use third-party (i.e., private corporation) installers that would reap these advantages and pass some of the savings onto the County. This is a great option for County facilities. An aggressive plan for photovoltaics may be able to reach a capacity of 13 MW by 2030. This would likely exceed the net metering allowances, so these installations would either need to use all of the energy on site, allow some of the energy to be wasted, or invest in energy storage. If the efficiency of the cells increases by a modest 2% per year, the primary energy displaced by 13 MW of photovoltaic modules would be approximately 400 billion Btu annually (i.e., 3 million gallons of diesel equivalent). Draft Executive Summary - 18 Personnel to Implement the Hawaii County Sustainable Eneray Plan For many of these recommendations to be realized, the necessary personnel must be in place to implement them. Although Hawaii County would spend an estimated $750 million in 2007 on energy, there are currently no County-funded personnel to deal solely with energy issues. In order to achieve the County goals for efficiency and renewable generation, it is recommended that the County create three full-time positions: 1. a green building expert who would be responsible for retrofitting existing County buildings with energy efficiency measures, facilitating third-party installations of solar water heaters and photovoltaic modules, assisting in energy efficiency certification for all new County buildings, and updating and interpreting the Model Energy Code; 2. an energy policy analyst who would be responsible for the implementation of the Sustainable Energy Plan, formulating County opinion on State level legislation and PUC dockets, and participating in energy forums and boards; and 3. an energy and sustainability advisor at the cabinet or deputy level who would facilitate the delivery of accurate and timely information to the administration and cut across departments and to develop consensus between department administrators. Implementation There are numerous actors who each play an important role in meeting the energy goals of the County. A summary of potential actions is provided here: The County The highest impact actions that the County can take to meet its energy goals include improving the Model Energy Code for residential and commercial buildings; creating incentives for builders to find innovative ways to improve efficiency; mandating that all County buildings obtain Energy Star certification; issuing requests for proposals for third party photovoltaic modules and solar water heater installations on County properties; distributing information to residents on compact fluorescent light bulbs, solar water heaters, mass transit, and Energy Star appliances; increasing the number of buses used for mass transit; creating a feebate system to improve automobile efficiency; instituting a mandate for efficient vehicles in the County fleet; creating energy zones for biofuel development; and assisting with the funding of agricultural and mill pilot project for biofuel development. Other County actions that would also have a positive contribution are fixing the leaks in the Hilo water system; creating a water conservation policy; adding generating pressure reducing valves to the water system; eliminating the weight tax for efficient vehicles; and creating incentives for plug-in hybrid vehicles when they become publicly available. In addition to actions that the County can directly execute, the County can also express its support for the recommendations upon which the State, PUC, and utility must act. Consumers The highest impact and most financially advantageous actions for consumers to take would be to replace all incandescent light bulbs with compact fluorescents and install a solar water heater, possibly using the Pay As You Save program. Both of these actions Draft Executive Summary - 19 would pay for themselves several times over. Additional high impact actions that consumers can take include minimizing air conditioner use, buying an efficient air conditioner, using the free mass transit and ride share systems, and purchasing the most efficient car that meets their needs. Other activities that could help the County meet its energy goals include participating in the Community Development Planning process; providing feedback on the Analysis and Recommendations for the Hawai `i County Energy Sustainability Plan; advocating for the retirement of the least efficient fossil fuel plants; purchasing other Energy Star appliances; installing cool roof technologies such as radiant barriers; and, if building a new home or addition, hiring a builder who optimizes energy efficiency. Consumers who support the goals of the Energy Sustainability Plan can assist in its implementation by writing letters of support to local newspapers, telling friends and family about energy efficient actions that they can take, and expressing their support for energy sustainability measures to their County Council Member. The Utility The utility is one the most influential organizations in the County's energy sector and its support would make the County's goals of efficiency and renewable generation achievable. The utility can accelerate the use of renewable generation by retiring the Shipman and Puna steam facilities, working with Puna Geothermal Venture to increase their capacity to 60 MW, and issuing a request for proposals fora 40 MW wind/30 MW pumped storage hydro development. The utility can also negotiate its contracts at below avoided cost to lower rates; use consistent oi] forecasts for setting their base rate and planning in the IRP process; incorporate the cost of greenhouse gas emissions in their planning; expand the time-of- day pricing system with more smart-meters and a larger price differential; expand block pricing with a larger price differential; and enter long-term contracts with local biofuel providers. The State In addition to the many initiatives that have already passed at the State level, the State could institute a feebate to encourage energy efficient automobile purchases and pass and implement the Global Warming Solutions Act to reduce greenhouse gas emissions. Other actions that would have a positive effect for the County's energy goals include the elimination of the state sales tax, registration fee, and weight tax for energy efficient vehicles; and weighting the Alternative Fuel Standard and Renewable Portfolio Standard to reflect the life cycle benefits of various biofuel production schemes. The state should encourage maximizing renewable energy production at the Natural Energy Lab Hawaii Authority (NELHA). Drafr Executive Summary - 20 Public Utilities Commission The PUC has great influence over the actions of the utility and could push the utility to adopt an IRP plan that focuses on accelerating the use of renewable generation; separate energy efficiency in the Renewable Portfolio Standard and work with the Hawaii Natural Energy Institute to ensure that the Renewable Portfolio Standazd is high enough to influence behavior; enforce the competitive bidding process; delink avoided costs from the price of oil; incorporate risk shazing of future oil prices in the utility base rate; require that the utility uses the same oil forecasts in settings the base rate and IRP planning; require that the utility incorporate the cost of greenhouse gas emissions in IRP planning; and expand the time-of--day pricing system with more smart meters and a larger price differential. Builders In helping to meet the County's energy goals, builders can work with the County on adopting Model Energy Code requirements; determine which incentives for energy efficiency can be claimed for the projects on which they are working; train employees to use energy efficiency and renewable generation technologies; and read the "Field Guide for Energy Performance, Comfort, and Value in Hawaii Homes"6 (for residential structures) and "Hawai`i Commercial Building Guidelines for Energy Efficiency".~ The Commercial Sector Commercial enterprises should assess the financial viability of installing solar water heaters or photovoltaic modules; introduce water saving techniques and water reuse processes; utilize compact fluorescent light bulbs, programmable thermostats, and efficient air conditioners; and require efficient construction. Appliance retailers can provide EnergySaver flyers specific to Hawaii County's electricity costs and promote the purchase of Energy Star products. Researchers To help meet the County goals for the Sustainable Energy Plan, researchers can run agricultural and mill pilot projects for biofuel development; conduct a life cycle assessment on various production schemes for biofuels; and continue to encourage and support research and development into emerging energy technologies such as hydrogen, ocean thermal energy conversion, and wave energy. The recommendations outlined in this report should serve as a catalyst for discussion and as a platform for community engagement. The report aims to inspire a productive dialogue among residents, policy makers, industry, and non-governmental organizations. The Big Island has long demonstrated a commitment to sustainability and a strong ethic of environmental stewazdship. State and County leaders have taken proactive steps to diversify energy supply and encourage energy efficiency. These policies include providing tax incentives for renewable energy generation, instituting a free public bus e Available online at: http://www.Hawai`i.gov/dbedUinfo/energy/efficiency/fieldguide/ ' Available online at: http://www.Hawai`i.gov/dbedt/ert/cbg Dra& Executive Summary - 21 system on the Big Island, funding research into and development for alternative energy technologies, installing energy efScient appliances in public buildings and other facilities, and a number of other important initiatives. This report builds on these efforts to offer a comprehensive and ambitious plan for future energy management on the Big Island. The recommendations strengthen existing policies, address current policy gaps, and suggest additional courses of action. A multifaceted approach that examines all aspects of supply and demand is essential because energy challenges cannot be effectively addressed in isolation. Draft Executive Summary - 22