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The main reason our power bills have not been lowered by the current geothermal production is the "avoided cost" formula of pricing. This state regulatory policy pays the geothermal producers the same amount that the electricity would cost if produced by the non-geothermal means, which in our case is oil. The rationale for this was to insure that somebody would take the risk to invest in geothermal. It worked, and we have a working, financially viable system in place, but the regulatory process needs to be changed to reflect a more reasonable profit margin on geothermal production. I understand that even the producers have agreed to price new geothermal on a cost plus margin basis vs. avoided cost. The fossilized and HELCO-dominated Hawaii regulatory bodies have not been quick to embrace this change, however, and I'm not sure whether the changes have been formally enacted. Perhaps someone could enlighten us.
Bottom line for me is that geothermal has proven its financial advantages, but is locked into a pricing structure that is outdated. Safety and environmental issues can and have been addressed. The existing facility had a blow-out twenty years ago, but, as Mr. Ha notes, the technology has progressed considerably in that time. Still, I think that with an island that is indeed "big," we should look to locating new geothermal plants as far away from heavily populated areas as possible. Geothermal can be done right. My biggest question is whether the Hawaii policitians on both sides of this can be objective and fair enough to do it and do it right.
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/Punafish and Jerry Carr:
You both have it right.
We need to use what we have available here, we need to do it safely utilizing our good and bad past experiences, and we need to do it for our benefit not Oahu's.
Or anyone else's.
We could really be "paradise" and economically secure if we do this right.
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http://www.energy.com.ph/our-social-and-...vironment/
The Energy Development Corp that does the geothermal development in the Phillipines follows a triple bottom line model. They consider the community, the environment as well as the investment.
I do agree that it is not just about the technology, it is about including the community in the discussion. This needs to be bottom up rather than top down. Due to hardened positions this won't be easy, but it must be done. Encouraging is that Council person Pilago will be involved in the public safety aspects. He has his heart in the right place.
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The new 8MW PPA between PGV and HELCO isn't tied to the "avoided cost." This additional power generation recycles the brine byproduct of the geothermal process http://tinyurl.com/85j9dy3. In addition, PGV and HELCO agreed to convert part of a previously agreed upon PPA from avoided cost to fixed pricing.
http://hahaha.hamakuasprings.com/2011/03...ermal.html
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You are right Jerry. Avoided cost was a means to encourage development when oil price was around $20 per barrel. The PUC did change that to competitive bid recently. All new contracts are now competitive bid. Up until recently, a 25MW and a later 5MW contract were on the avoided cost formula. However, the PUC recently approved a new 8MW contract that was based on the new method. Although, the most recent avoided cost calculation was higher than 20 cents per kWh, the new 8MW contract was negotiated below 10 cents kWh. And, the old 5MW contract was renegotiated. It was renegotiated to around 11 cents kWh. The original 25MW was not renegotiated. New geothermal production will be on competitive bid. The estimated cost of geothermal production is less than 10 cents kWh according to a recent study. How much and how soon this translates into lower rates will depend on what the utility does. But, it will for sure translate into stable rates and then into lower rates.
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Thank you for the nuts and bolts comment Richard.
Puts some numbers into the discussion.
My figures roughly agree with yours.
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Hawaii island no longer refines oil, so none of this islands fuel is from locally produced residual oil (re: "Moreover, sixty percent of the petroleum used to generate electriity is ‘residual fuel oil’ ") HELCOs largest & "most efficient" fuel oil plant runs on diesel...
With any system mentioned for this island, it must be remembered that we do have a very limited population, slightly skewed peak production requirement, and a fairly old & inefficient distribution & production infrastructure.
Geothermal electrical energy production is not new technology. Most of the residents of the SF bay area have utilized geothermal produced electricity since 1921, from the Geysers. ( http://www.geysers.com/ ) HELCO is decoupled from most non-fossil fuel production, but does own & run the oldest electric production on island from a run of the river hydroelectric plant.
No matter what production you chose, there are cost/benefit analysis that must be looked into. One of the benefits of high energy costs is that most of us have really looked at our electric consumption, and most everyone I know has done due diligence to eliminate some of our energy waste. The avoided costs basis does give incentive for innovation in production, and we have seen some early innovation technology here.
There is no magic elixir to our energy production. Most systems have front end energy & environmental expenses are just beginning to be looked at (one of the things most of us looking at PV tend to want to negate... the environmental cost of the panels, the storage & the backup...) To every electric generation system I have heard mentioned, there are a number of environmental costs, some close to the consumer of the electricity, some at the point of production...
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I still do not understand why placing turbines in the one way channel between the Big Island and Maui isn't done. It could provide electricity for the entire state at minimal cost.
Sheesh...
I want to be the kind of woman that, when my feet
hit the floor each morning, the devil says
"Oh Crap, She's up!"
I want to be the kind of woman that, when my feet
hit the floor each morning, the devil says
"Oh Crap, She's up!"
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Pam,
Reason 1: This has been mentioned in previous threads; maintaining a turbine in that channel would be very hazardous, as it is one of the most treacherous channel areas on earth (just imagine trying to do the de-fouling maintenance, much less any major maintenance work).
Reason 2: That turbine placement is within the migratory routes of many animals, including monk seals, whales, and fish.
Reason 3: Lack of any infrastructure currently in that area for the generator.
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Aloha Punatic by choice.
Very smart people on this thread.
Here is a quick and dirty calculation. A year ago, October, the "avoided cost of generating electricity"--which is 90% due to oil--was approx 15 cents kWh for the Big Island. The cost to the customers then was approx 35 cents. The 20 cents difference can be attributed to running the grid. The cost to generate geothermal now and in the long run is approx 10 cents per kWh. Add the 20 cents to run the grid and you get a cost to the customer of about 30 cents per kWh. This is less than we pay now, and will be stable for a very long time. How soon we get the benefit of the lower price depends on soon the utiity implement geothermal and writes off oil fired plants. And, as oil prices rise, we become relatively more competitive to the rest of the world. Our standard of living rises and we slow down the export of our most precious commodity--our kids.
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