Posted on: Tuesday, October 26, 2004

$100M project provides big chill from deep sea

By Sean Hao
Advertiser Staff Writer

During the heat of the day Hawai'i's ocean waters cool swimmers, surfers, tourists and soon maybe even people working in downtown Honolulu.

So far use of seawater to cool buildings is limited to relatively small-scale projects, including one at the Natural Energy Laboratory Hawaii Authority in Kailua on the Big Island.

Now, St. Paul, Minn.-based Market Street Energy Co. plans to use water from the deep seas to air-condition 65 buildings in downtown Honolulu starting in mid-2007.

The estimated $100 million project has received permission from lawmakers to issue $32 million in tax-exempt bonds to finance the alternative air-conditioning system. On Thursday, Market Street Chief Executive Anders Rydaker will discuss the seawater-based air-conditioning system at an energy expo at the Sheraton Waikiki Hotel.

The use of cold seawater pumped from below the ocean surface promises to cut cooling costs while reducing crude oil consumption and energy demands on Hawaiian Electric Co., said Rydaker.

Unlike crude oil, which provides the bulk of the state's energy needs, seawater is an abundant, reusable resource for Hawai'i.

Converting major downtown electricity users to seawater-based air conditioners could cut annual demands for oil by 215,000 barrels and drinking water by 400 million gallons, Rydaker said.

"For the state, it's basically that you don't have to import a lot of oil," Rydaker said.

Building owners that sign up for the service should it become available, would lock in rates at an estimated 80 percent savings over a 20-year period, he said.

"The biggest thing for the potential customers working in downtown Honolulu is to get lower and stable electricity costs," said Rydaker.

Apart from a state project cooling three buildings at NELHA, the Honolulu Board of Water Supply has explored using seawater from wells drilled to depths of 3,000-feet to cool the John A. Burns School of Medicine under construction in Kaka'ako.

However, test wells drilled under Kaka'ako this year found the water was not cold enough to air-condition buildings. Instead, plans are to use underground seawater to cool the heat generated by traditional air-conditioning methods.

"We're still able to save energy and water with our approach," said Barry Usagawa, water resources principal executive for the Board of Water Supply.

The system planned by Honolulu Seawater Air Conditioning LLC, which was formed by Market Street, would rely on seawater pumped from depths of 1,600 feet to 3,000 feet via a four-mile pipeline.

That pipeline, which would be tunneled under the island's reef, would lead to a central cooling station where the seawater would cool fresh water that circulates through each building. The resulting warm water would be pumped back into the ocean.

In order to proceed, Honolulu Seawater is seeking $20 million in investments with the remaining $80 million financed through bonds. The company also needs to acquire customers and permits to lay its pipeline, Rydaker said. The project hopes to benefit from state investment tax credits meant to spur growth in Hawai'i's technology industry.

Rydaker will present more information on the proposed seawater-based air-conditioning system from 2 to 3 p.m. at the Hawaiian Electric Co.'s 2004 Energy Expo. Admission for the two-day event that starts tomorrow is $189 a person. For more information, call 543-4790.

HECO spokesman Jose Dizon said the utility has signed a memorandum of understanding with Honolulu Seawater to hold continued discussions on the feasibility of the technology.

"It's too early to tell if it's economical, but it's something we're looking at," Dizon said.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.