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The Honolulu Advertiser
Posted on: Friday, April 2, 2010

HECO seeking Isle biofuel suppliers

BY Greg Wiles
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Hawaiian Electric Co.'s new generating unit at Campbell Industrial Park burns biofuel instead of the diesel oil that currently generates most of the utility's power.

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Hawaiian Electric Co. has issued a long-awaited call for homegrown biofuels, a move that's expected to benefit the state's agriculture industry.

The state's largest utility is asking potential suppliers of biofuels made from locally grown crops or waste animal fat to submit proposals as part of its effort to obtain more energy from renewable sources.

"We're very open to make this happen," said HECO spokesman Peter Rosegg.

HECO's request for proposals, along with a push expected from the U.S. Navy and other military branches in the state, is expected to boost biofuel's prominence in Hawai'i in coming years. Most news about sustainable energy projects in the state has centered on wind and solar power, with a smattering of talk about algae-to-oil, ethanol and other potential projects.

HECO is offering to start buying biofuel in the next five years. It plans to use biodiesel and other fuels made from plants, animal waste or organic material at its generating plants on O'ahu, Moloka'i, Lāna'i, Maui and the Big Island.

The biodiesel could go directly to diesel burning generators or to a plant that runs on biofuel thatHECO has built at Campbell Industrial Park on O'ahu. The utility also wants to mix biofuel with low-sulfur fuel oil burned at its Kahe power plant on O'ahu.

HECO currently gets most of its electricity from generators that run on fuel oil and diesel.

"Hawaiian Electric is totally committed to building a clean energy economy in which at least 40 percent of electricity comes from a portfolio of renewable sources," said Robbie Alm, HECO executive vice president. "Sustainable biofuels are critical to that mix."

A number of local firms already have begun to look at biofuels, including some that hope to extract oil from fast-growing strains of algae. HECO's Maui Electric subsidiary has taken steps to explore this technology, signing an agreement with HR BioPetroleum Inc. and Alexander & Baldwin Inc. to build a production facility near Maui's Ma'alaea power plant.

Hawai'i has also been chosen as the site for an initial collaboration between the U.S. Department of Agriculture and the U.S. Navy on reducing the use of fossil fuels and increasing the use of renewable energy sources.

The efforts may mean brighter prospects for Hawai'i's agriculture industry, which has declined since the glory days of sugar and pineapple. But they also raise questions about water and land use issues.

"The growing interest in biofuel production presents new demands for Hawai'i's agricultural lands," said Sandra Lee Kunimoto, chairwoman of the Hawaii Board of Agriculture. "With good planning, biofuel production and food production can work in synergy, allowing both to thrive."

As an example, Kunimoto said that algae-based biofuels can use animal waste. By-products of the production have potential as aquaculture and livestock feed, she said.

HECO set a June 19 deadline for proposals from potential biofuel suppliers, with only companies that meet environmental standards in terms of growing, production and processing qualifying. HECO also will evaluate proposals based on how well they meet sustainable use guidelines developed by the utility in partnership with the Natural Resources Defense Council.

"This call for proposals sends a clear market signal to land owners and agricultural interests that if they plant today they will be able to sell their products for a reasonable return on their investment and effort tomorrow," Alm said in a press release.

"Once proposals are received, we hope we will find viable plans so we can negotiate volume, price, locations and other details to make this happen," he said.