In Part 1 of this series, we gave an overview of the project and explained why it’s being studied. Today, we analyze each of the four components of the project, summarize what needs to be resolved and explain how that might happen, if it’s to go forward.
To give a sense of the scale of the challenge for Hawaiian Electric (and its vertically integrated subsidiaries HELCO, MECO, and HECO that operate the independent island grids) of incorporating Big Wind’s 400 megawatts of power into its electric service, consider:
According to the 2009 National Renewable Energy Laboratory (NREL) report “The Potential of Renewable Energy to Reduce the Dependence of the State of Hawaii on Oil,” the islands’ untapped renewable energy potential can yield 2,133 MW of power—which approaches the state’s current total electrical capacity of 2,414 megawatts (83 percent of which is oil-driven). The wind power to be derived from Molokai and Lanai will add 400 MW of power, a giant step toward Hawaiian Electric’s goal of 1,100 MW of renewable capacity (codified by Act 155) by 2030.
But building converter stations (up to 8 stories tall) and transmission lines for Big Wind will pose a large and as yet unknown expense. What could be even more daunting, if not prohibitive, though, is the unknown cost of integrating the added energy into the existing grid and making it work. Because energy must be generated as it’s needed, modifications must be made to accommodate intermittent power sources like wind, wave and solar. Since the Islands’ grids are all isolated, there’s no way to funnel off surplus power the way inter-connected grids can on the mainland. HECO is experimenting with “smart grid” technology that will help monitor and regulate the flow and distribution of added energy. HECO is also studying how much it will ultimately cost to ensure that service can be delivered without failures or interruptions.
What is 65 miles long and packs 660 MW of electricity that can power 600,000 homes? A submarine and subterranean cable completed in 2007 by a company called PowerBridge that transfers low-cost energy from New Jersey to power-hungry consumers on Long Island. (Here are some photos of the undersea installation.)
Undersea power cables are not a new technology. In fact, there are more than 20 across the globe — beneath the English Channel, the Baltic Sea, the Cook Strait, the Adriatic Sea, even San Francisco Bay. The distance covered by Hawaii’s proposed cable will depend on the route that’s chosen. Molokai is about 35 miles, and Lanai about 70 miles, from the proposed landing sites (near Mokapu or Pearl Harbor) on Oahu. From there, the cable would run underground to converter stations that would link the power to Oahu’s grid.
The state is considering a high-voltage, direct current cable, favored over alternating current for long distance transmissions. To ensure reliability, a 400 MW rating requires the bundling of three or more conductors (like the one pictured), each approximately 4 inches in diameter.
After validating the technical feasibility of such a cable in Hawaiian waters, the state recently selected Los Angeles firm AECOM Technology Corp. to compile a $2.9 million Environmental Impact Statement for the undersea cable. The company will survey the potential impacts on coral reefs, coastal aquatic ecology, marine life, endangered species, and cultural, historic and archaeological resources. Federal stimulus funds will pay for the 18-month study that will ultimately determine the preferred route(s) and landing sites. Concurrently, a “subject matter expert” will be hired to help gauge the project’s financial feasibility. The state estimates the cable’s cost to be $1 billion, to be paid for by “some combination of utility customer and taxpayer funds.” Actual construction of the cable itself—which may not begin until three years after the EIS and permits are finalized, could be completed in a matter of months.
Though they can cost twice as much as overhead lines, developers are starting to see submarine cables as an attractive alternative because they don’t engender as much political opposition. According to a New York Times article — which mentions that PowerBridge is also considering Hawaii’s undersea cable project — the company’s president Edward Stern points out, “The fish don’t vote.” According to Allen Kam of the Department of Business, Economic Development and Tourism (DBEDT), the department overseeing the project, the state has not yet contracted with any cable engineer.
“We are hoping to get our cable developer on board by the end of the year,” Kam says. “Until then there’s a lot of work to do.”
Hawaii already has about half a dozen interisland communications cables in place, and the environmental impacts of the undersea power cable are expected to be minimal compared to the enormous benefit it can potentially bring. The main question with the cable is whether it makes sense to go forward with it before the wind farm development is secured.
What is 260 feet tall, 60 feet wide, and sports three 150-feet-long rotor blades? A wind turbine that will generate between 1.5 to 3.0 MW. Castle & Cooke’s proposed wind farm in Kaa, the ahupuaa that comprises Lanai’s northwest corner, could feature between 100 and 200 such turbines spread across as much as 22,000 acres—almost one-quarter of the small island.
From its base to the highest arc of the blade, the turbines are 410 feet tall, about 20 feet short of the First Hawaiian Bank tower in Honolulu, the tallest building in Hawaii.
For the people of Lanai, this is, understandably, a big deal. Donavan Kealoha, president of Lanaians for Sensible Growth, says that for the past 18 months the organization has conducted focus groups, “talk story” information sessions, and a random survey to assess the community’s interest in the wind farm. He hesitated to share the results of these efforts without consulting with his board of directors; however, many of the residents’ concerns are voiced on the group’s website.
Residents remain wary of the operations of Castle & Cooke, which owns 98 percent of the island. The flailing economy — which presents a funding challenge for the wind project — has halted construction of resort homes on the island. The company suffered $20 million in losses a year in 2008 and 2007, and $31 million in 2006, and there is uncertainty over who will replace 86-year-old Castle & Cooke owner David Murdock, a decision that will have a tremendous effect on the island’s future. Some Lanaians also worry that the necessary road and harbor improvements for the wind farm will open the door to more resort and real estate development.
There is also much controversy over the site location, where powerful winds, with gusts reaching 50 mph, shaped the dramatic rock formations at Keahiakawelo, known to visitors as “The Garden of the Gods.” This culturally significant area houses heiau (temples), petroglyphs and Hawaiian iwi (bones).
This raises a philosophical debate over which of several competing values are most important: Cultural preservation? Resource protection? Economic growth? Energy security?
The number of successful and proposed wind farm projects shows that by regulatory criteria, the benefits of wind farms outweigh the costs. Harnessing wind from remote areas to serve large populations is a strategy being implemented all over the planet — most aggressively, in fact, in the ocean. Wind turbines rise from the North Sea, the East China Sea, and in April, the federal government approved Cape Wind, the first offshore wind farm in the U.S. — 130 turbines that will generate up to 420 MW arrayed in parallel rows across 24 miles in the Nantucket Sound five miles off Cape Cod.
Those models, however, don’t address the issue of justice that is perhaps the most contentious of all for the Lanai and Molokai residents who will share a disproportionate responsibility for meeting the state’s energy needs under the Big Wind initiative.
At a Lanai community meeting, HECO’s Robbie Alm pointed out that without the rural islands’ help, “Oahu stays on oil, and Oahu’s economy ultimately can determine their economy. “But at the same time,” he said, “if we end up doing this, we really need to talk to those islands about givebacks or some other things to create some level of justice… of having large intrusions on their land for the sake of the state of Hawaii.”
DBEDT’s facilitator of renewable energy, Joshua Strickler, added, “I don’t want to give the impression that this cable and these wind farms on the neighbor islands are the only thing we’re doing.” He listed examples like a wave energy project at Kaneohe, a solar project at Campbell Industrial Park, and the Kahuku wind farm. “But when we look at the resources that are available on Oahu and the demand on Oahu—this is where the population is, this is where everybody lives—we don’t think we can get there on our own.”
A telling local opinion is the single comment that has been posted on the Interisland Wind forum. The subject line is “why we do not want wind farm.” Besides aesthetic and environmental impacts, it calls to attention a threat to the subsistence lifestyle that many of the island’s economically downtrodden residents have been forced to adopt: “Even if C&C gave access it wouldn’t be the same for shore fishermen, divers, surfers, or just beachgoers in general. What about hunters? … In my experience, axis deer and mouflon are not big fans of, well, ‘BIG FANS.’”
This comment raises questions about access and preserving the resources and access to the resources on which islanders rely for their livelihood. State rep. Hermina Morita, who chairs the House Energy Committee, explains that the broader issue that needs to be addressed is the economic future of Lanai and Molokai.
“These proposals should not be framed as pitting one island against another. What is important is building an energy infrastructure where everyone throughout the state can benefit from, not leaving any community behind,” she says. “Lanai and Molokai are equally as dependent on imported fuel and foods as the rest of the state with significantly high energy costs. Their small populations cannot bear the high cost of modernizing their existing electricity infrastructure for their small grids alone should they choose to be independent of a statewide system. In a move towards more decentralized systems, the reality is that only those that can afford to install these systems will benefit. Those who do not have the financing capability will be stuck with maintaining an aging, antiquated infrastructure. These are the equity and social justice issues that have to be carefully considered when moving forward—or even staying static.”
What is 54,000 acres, covers more than a third of Molokai, and is valued by its owner at $300 million?
The answer is the land referred to as Molokai Ranch, held by Molokai Properties Limited (MPL), a subsidiary of Hong Kong-based GuocoLeisure Limited. At the end of March 2008, after a ferocious battle over the development of luxury homes at Laau Point, MPL shut down its operation of Molokai Ranch, putting 120 of the island’s 7,500 residents out of work. It later tried to cease its water and sewage operations, which serve half the island’s households, but was ordered by the Public Utilities Commission to continue service. It now charges Molokai residents some of the highest rates in the nation. These events were enough to leave a permanent bad taste for multinational, corporate landowners among the tight-knit Molokai community.
When First Wind, which controls three wind farms in Hawaii — Kaheawa I (30 MW) on Maui, and new projects Kahuku Wind (30 MW) on Oahu and Kaheawa II (21 MW) on Maui — first began exploring the idea of installing a wind farm on Molokai in 2006, it talked with community groups and kept its plans fairly transparent. Initially, the project was to unfold in two parts. First Wind was considering Hawaiian homestead land at Hoolehua for the first phase, and land owned by MPL for the second phase. In mid-June, citing insufficient space, First Wind scrapped the original proposal to set 20 turbines on the Hoolehua homestead land. There was both community support and opposition to the idea, with opponents decrying the detrimental environmental and cultural impacts of the proposed farm.
With the dust from Laau yet to settle, the idea of siting a wind farm on MPL land has renewed suspicion and again splintered the island’s population. First Wind had offered, rather generously, to chip in $50 million toward the community’s ongoing efforts to purchase Molokai Ranch and then lease the land from the community. First Wind actually approached GuocoLeisure with a purchase offer, but it was rejected for falling short of the owner’s property valuation.
So as it stands, First Wind currently has no place to put its wind farm. Under the Big Wind agreement, if either Castle & Cooke or First Wind is unable to move forward with their wind farm, the other company retains the option to scale its project to 400 MW — an option that is technically feasible and financially enticing.
Here is where the political strategizing gets interesting. If Castle & Cooke is unable to finance the Lanai farm, or abandons the project in the face of community opposition and company uncertainty, First Wind may expand its initiative to 400 MW — and MPL would be the beneficiary landowner. That leaves the company in a position where it seems unlikely it would want to sell that land.
MPL certainly realizes the value of that property. According to its 2009 annual report, “The Group continues to remain positive about the value of its land-holdings in Molokai. Several sales of agriculture land during the fiscal year were transacted at prices well above MPL’s book value, an indication of the worth of these properties.” One purchaser, incidentally, was another neighbor Molokai residents are wary of: Monsanto, which grows GMO seed corn on the island. Monsanto leases 1,850 acres of Molokai Ranch land.
Interestingly, Monsanto and MPL advocates had joined forces to campaign against the Hoolehua wind farm on homestead land. Also, according to Karen Holt, executive director of the vigilant Molokai Community Service Council, some of the MPL consultants who pushed the development at Laau — Isaac Hall, Molokai Ranch’s lawyer, and the Hawaii Alliance for Community-Based Economic Development (HACBED) — have been hired by anti-wind farm groups on Lanai.
“My best guess is that Molokai Ranch’s strategy is to insure that the only viable site for a large-scale wind farm is their property,” Holt surmises. “If neither DHHL (Department of Hawaiian Home Lands) nor Lanai is able to put up windmills, that leaves Molokai Ranch as the default site.”
The Molokai community, Holt continues, is most concerned about “whether this community will receive benefits commensurate with the value of this project to the off-island developers and consumers.”
“The proposed wind farm is a multi-billion dollar project that is only possible on Molokai because its people have successfully resisted large-scale resort and subdivision plans in the areas where the windmills would be constructed,” she explains. “Molokai has been criticized for decades for taking this protective stand. But without it, the ranch would have succeeded in putting 30,000 people on the West End of Molokai, and there would be no room for windmills.”
Holt believes that most residents will support the wind farm so long as the island receives just compensation. In a letter to the editor in the Molokai News, a group of community members specified what they thought that should be:
“We do not oppose windmills as an alternative to oil for energy. But we absolutely oppose any deal between Molokai Ranch and First Wind,” the letter reads. “Molokai is the last Hawaiian island. The assets that we have worked so hard to save are lost forever on other islands, including Oahu, the island that is now asking Molokai to satisfy its ever-growing demands for energy. If Molokai Ranch begins earning new revenue from windmills so that it can fund its development plans, then we can all say aloha `oe to the last Hawaiian island. All of the blood, sweat and tears that went into protecting this special place will have been wasted. As payment for the use of our island to provide power to Honolulu, we humbly ask for the return of foreign-owned Molokai Ranch lands to those of us who live here. We love this island. And we will take good care of it for the sake of our children, our grandchildren and generations to come.”
In the end, Big Wind’s recipe for renewable energy is simple—a wind farm to harness power, a cable to channel it, and grid upgrades to accommodate it. The hard part is procuring these ingredients. Think of it this way: There are multiple chefs baking this cake, but the butter’s too expensive, the sugar cane farmers are on strike, and they’re still trying to figure out how much flour is needed; meanwhile, the cracked eggs are waiting in the mixing bowl. So what to do?
Here’s some perspective on where things stand, based on an analysis of the individual challenges facing each stakeholder.
Interisland undersea cable: AECOM will proceed with the EIS, and in the next year and a half, will propose a preferred route informed by cost comparisons, measured impacts on the reef and marine life environment, and practicality of landing site options. Given the success of submarine power cables elsewhere, there’s little to suggest an interisland cable wouldn’t be a worthwhile endeavor. The biggest question that remains is how the project will be financed; the state is looking at a combination of utility customer and taxpayer funds, as well as federal assistance and long-term loan guarantees.
HECO improvements: HECO will incur the cost of the associated on-shore infrastructure. This amount is currently under consideration and depends on what technical improvements need to be made to Oahu’s grid, as well as the location of the landing site, which will determine the length of the transmission lines required. The purchase price for the power, which HECO will negotiate with the providers, will be passed on to utility customers with no mark-up.
Lanai wind farm: Castle & Cooke has yet to announce whether it will proceed with a 200 MW farm in the face of strong community opposition. On the one hand, the project is an opportunity to recoup the $1 billion that has been invested on Lanai. On the other hand, the company has halted its other development projects on the island, and its bleak financial outlook may impede progress. The wind farm is expected to create only 15 to 20 local jobs, with no other tangible benefits to the residents. Without sufficient paybacks, it’s implausible that the community will support a project that will mar the pristine landscape on a quarter of their island and threaten access to the resources that supplement their livelihood.
Molokai wind farm: A wind farm appeals to Molokai residents more than other types of development, but the present deterrent is that Molokai Ranch owns the land on which it can be sited. Both the Ranch and the community recognize the financial boon a wind farm would provide, which sets up a stalemate between the Ranch, which sees no obligation to sell its land, and residents who will fight tooth and nail against any project that would benefit the Ranch. A proposal from community leaders suggests what would arguably be the most just solution: The state helps purchase Molokai Ranch, to be put in the community trust. The community recoups control over its most precious resource, its land. GuocoLeisure gets its asking price and will have no more wars to wage on Molokai. First Wind leases the land at a generous price and also makes a valuable profit while generating renewable energy. Oahu residents benefit from the clean power. HECO achieves its HCEI goals. The state has compensated the Molokai community for tapping its resources. Really, the only party that doesn’t stand to gain from this scenario is Castle & Cooke.
The Molokai community’s proposal promises the most slices of cake, if all the ingredients can come together. There’s time — the oven, the state admits, is still preheating.
“Since we still are at the planning stages of this, we don’t have all the answers,” DBEDT’s Allen Kam says. “We want to be efficient but we also want to make sure our efforts are fruitful. One of the questions we’re batting around is, ‘What’s the most effective way to figure this out?’”
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