HONOLULU — Hawaiian Electric Company and Hawai‘i BioEnergy on Monday announced they have agreed on a contract for a supply of 10 million gallons per year of locally grown and processed biofuel for power generation at Hawaiian Electric’s Kahe Generating Station. The contract now goes to the Hawai‘i Public Utilities Commission for review with input from the State Consumer Advocate.
Dedicated sustainable energy crops for the renewable fuel will be grown on the island of Kaua‘i, on largely fallow and underutilized Grove Farm land. The crops will be processed into biofuel on Kaua‘i for shipment to O‘ahu, according to a joint press release from HECO and Hawai‘i BioEnergy.
“We hope to give a tremendous boost to local agriculture on Kaua‘i while increasing the energy produced from renewable sources in Hawai‘i and reducing our heavy dependence on imported fossil fuels,” said Joel Matsunaga, executive vice president and chief operating officer of Hawai‘i BioEnergy.
The 20-year contract offers a stable pricing structure not linked to the volatile price of petroleum fuel. It calls for a one million-gallon test batch to be delivered within 48 months of PUC approval of the contract. Delivery of the 10-million gallon annual supply is to begin within 60 months of PUC contract approval.
Matsunaga said the of locally grown feedstocks for biofuel production will improve Hawai‘i’s energy sustainability and security while creating jobs in our communities.
This is the third contract to result from an earlier request for proposals for locally grown and processed biofuels issued by HECO
“This is another step in establishing a local biofuel market, providing landowners with the assurance they need to commit to growing energy crops,” said HECO executive vice president Robbie Alm, adding that switching from fossil fuels to green fuels is part of HECO’s effort to develop a broad range of clean energy resources.
The anticipated annual 10 million gallons will represent more than four percent of Kahe power plant’s annual fuel use. HECO recently successfully tested blends of biofuel and low sulfur fuel oil at the Kahe plant, the largest on O‘ahu with a total capacity of 650 megawatts.
Hawai‘i BioEnergy has conducted extensive research to assess viable and sustainable biofuel feedstocks and processing technology. The site of the processing facility is being finalized. Liquid biofuel will be created by an established process using high temperature in the absence of oxygen to cause thermo-chemical decomposition of organic matter.
The biofuel supplied by Hawai‘i BioEnergy will comply with sustainable sourcing standards developed by the HECO companies in partnership with the Natural Resources Defense Council.
Hawai‘i BioEnergy is a consortium established by three of Hawai‘i’s largest landowners: Kamehameha Schools, Grove Farm Company, and Maui Land & Pineapple Company, with venture capital partnerships.
HECO and its subsidiaries, Maui Electric Company and Hawai‘i Electric Light Company, serve more than 400,000 customers on the islands of O‘ahu, Hawai‘i, Maui, Lanai and Molokai, home to 95 percent of Hawai‘i’s population, according to the release.
Visit www.heco.com for more information.