Policies, Incentives, Information

Transcription

1 Resources to Meet the Bioenergy Challenge Policies, Incentives, Information Maria Tome, Alternate Energy Engineer State of Hawaii Department of Business, Economic Development & Tourism dbedt.hawaii.gov

2 Challenges in Hawaii Small state, small market No fossil fuel resources Barriers to entry High energy costs External forces are significant Technology Global supply/demand Geopolitical events

3 Hawaii is the Most Petroleum-Dependent State in the Nation Hawaii United States Biomass 1.9% Coal 5.5% MSW 1.5% Solar 1.3% Geothermal 0.7% Photovoltaic 0.0% Hydroelectric 0.3% Wind 0.0% Hydroelectric Power 2.7% Nuclear Power 8.2% Biomass/ Waste 2.8% Geothermal 0.3% Solar and Wind 0.2% Coal 22.3% Petroleum 88.8% Petroleum 40.4% Natural Gas 22.9% Sources: State of Hawaii DBEDT 2004; U.S. EIA - Monthly Energy Review August 2006

4 Hawaii s Petroleum Imports 2005 NOTE: Arrows widths are roughly proportionate to percentages of oil imports from sources.

5 Changes in Origins of Hawaii s Crude Oil 60,000 50,000 ALASKA Thousand Barrels 40,000 30,000 20,000 SAUDI ARABIA CHINA VIETNAM INDONESIA BRUNEI MALAYSIA AUSTRALIA 10, OMAN PAPUA NEW GUINEA OTHER Sources: State of Hawaii DBEDT, 2006; and U.S. Energy Information Administration (USEIA), 2006.

6 Crude Oil Spot Prices January 1, 1998 through October 23, 2006 $80 $70 $60 $50 $40 $30 $20 $10 $- U.S. Dollars per Barrel Jan-98 Aug-98 Mar-99 Oct-99 May-00 Dec-00 Jul-01 Feb-02 Sep-02 Apr-03 Nov-03 Jun-04 Jan-05 Aug-05 Mar-06 Oct-06

7 $80 World Oil Price *, World Oil Price, History (2004 dollars per barrel) Projections $60 $54.08 $40 Forecast revised +$21.14 $32.94 $20 History AEO2005 AEO2006 $ * World oil price is the weighted average of imported low sulfur, light crude oil delivered to US refineries.

8 Futures Prices of Light Sweet Crude Oil Contracts for Four Nearest Months

9 Opportunities/Assets in Hawaii Abundant renewable resources (biomass, ag lands, wastes) High energy costs in all sectors make integrated energy projects* viable Federal and State support for renewable energy Local knowledge & ability Public support * Transportation fuels AND electricity

10 Hawaii s Renewable Energy Resources

11 State Energy Policy , Hawaii Revised Statutes Planning for the State's facility systems with regard to energy shall be directed toward the achievement of the following objectives, giving due consideration to all: 1) Dependable, efficient, and economical statewide energy systems capable of supporting the needs of the people; 2) Increased energy self-sufficiency where the ratio of indigenous to imported energy use is increased; 3) Greater energy security in the face of threats to Hawaii's energy supplies and systems; and 4) Reduction, avoidance, or sequestration of greenhouse gas emissions from energy supply and use.

12 Biofuels are Part of the Strategy Biofuels for use in existing vehicles E-10: 10% blend of ethanol with gasoline Biodiesel: can be blended with diesel (B5, B20) or used 100% in diesel engines Biofuels for use in flexible-fuel vehicles E85: 85% ethanol, 15% gasoline Biomass for electricity can provide FIRM power Waste-to-energy Biorefineries

13 Electricity

14 Hawaii Electricity Generation by Source, 2004 Renewable 8% Coal 16% Petroleum 76%

15 U.S. Electric Power Industry Fossil Fuel Costs Dollars Per Million Btu, May 2006 $10.00 $8.00 $6.00 $4.00 $2.00 $- $1.70 $8.79 $6.71 $2.94 Coal Petroleum Liquids Natural Gas Fossil fuel (average) Prices of Fossil Fuels Used for Electricity Generation in the U.S.

16 U.S. Primary Energy Consumption by Source and Sector, 2005 (Quadrillion Btu)

17 U.S. Electricity Generation by Source, 2004 Nuclear 20% Hydroelectric Conventional 7% Other Renewables 2% Coal 50% Natural Gas 18% Petroleum 3%

18 Hawaii s Electricity Rates Are the Nation s Highest Dollars per KWh $0.35 $0.30 $0.25 $0.20 $0.15 Hawaii and US Residential Electric Utility Rates KIUC* 32.3 HELCO* 28.5 MECO* 26.2 State Avg* 22.8 HECO* 18.8 Percent Increase in $ per kwh 1990 to Oct 2005 KIUC 128% HELCO 118% MECO 113% State Avg. 123% HECO 103% $0.10 US Avg* 9.74 $0.05 *Cents per kwh October 2005 US Avg 24% $ Sources: State of Hawaii DBEDT, 2005; and USEIA 2005.

19 Renewable Portfolio Standard Renewable portfolio standards. Each electric utility company that sells electricity for consumption in the State shall establish a renewable portfolio standard of: 10% of its net electricity sales by December 31, 2010; 15% of its net electricity sales by December 31, 2015; and 20% of its net electricity sales by December 31,

20 2006 Legislation Act 162 Authorizes the Public Utilities Commission (PUC) to determine whether the existing Energy Cost Adjustment Clause fairly allocates the risk of fuel cost changes between the public utility and its customers. Currently, changes in the price of oil are passed on to customers, without the utility absorbing any of the impact. Directs the PUC to establish a ratemaking methodology that removes or significantly reduces any linkage between the utility cost of fossil fuel and payments to independent power producers using non-fossil resources Strengthens the Renewable Portfolio Standards law by eliminating guaranteed utility profit language and authorizing penalties to be established for failure to meet the standards.

21 Alternative Transportation Fuels

22 U.S. Primary Energy Consumption by Source and Sector, 2005 (Quadrillion Btu)

23 Federal Renewable Fuels Standard 7.5 Billion gallons of biofuels (ethanol and biodiesel) by 2012 Each gallon of cellulosic ethanol counts as 2.5 gallons U.S. Environmental Protection Agency developing specific requirements Hawaii not included but may opt in

24 US Ethanol Demand (Billion Gallons Per Year) Source: Stillwater, 2003; 2005 Energy Bill

25 States With 10 or More Years of Fuel Ethanol* Use Alabama Alaska Arizona Arkansas California Colorado Connecticut Dist. of Col. Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maryland Michigan Minnesota Missouri Montana Nebraska Nevada New Jersey New Mexico New York North Carolina North Dakota Ohio Oregon Pennsylvania South Carolina South Dakota Tennessee Texas Utah Virginia Washington W. Virginia Wisconsin Years * As an additive to gasoline. 41 states

26 Hawaii s Gasoline* Now Contains 10% Ethanol E-10 * At least 85% of the gasoline delivered to retail stations or fleets

27 Gasoline Component Prices California, Dec Oct

28 CBOT Chartbook

29 Alternative Transportation Fuels Alcohol Fuels Ethanol E-10: Additive (10% ethanol + 90% gasoline): NOT an alt. fuel. E-85: Alternative fuel for E85 vehicles Methanol Biodiesel Additive OR replacement for diesel Hydrogen / Fuel Cell / Electricity LPG ( propane ) Natural Gas (CNG, LNG) Vehicles no longer available but could return Potentially significant; under development 30 years of local use but facing challenges If LNG available, this could change Others under development (P-series, diesohol) Federal definition: Code of Federal Regulations, Title 10, Part 490:

30 Federal Alternative Fuel Vehicle (AFV) Mandate State, Federal, and Fuel Provider Fleets are Required to Purchase AFVs Model Year Federal Fleets State Fleets Fuel Providers % 10% 50% % 15% 70% % 25% 90% % 50% 90% % 75% 90%

31 Ethanol-based Alternative Fuel: E85 Gasoline with 10% ethanol (E-10) is still gasoline. It's not an alternative fuel. An increasing number of new vehicles can use E85 (15% gasoline, 85% ethanol), which is an alternative fuel.

32 E85 Flexibly-Fueled Vehicles

33 DaimlerChrysler L Chrysler Aspen 4.7L Dodge Ram Pickup 1500 Series 3.3L Dodge Cargo Minivan 4.7L Jeep Commander 2.7L Dodge Stratus Sedan 2.7L Chrysler Sebring Convertible & Sedan 4.7L Jeep Grand Cherokee 2.7L Chrysler Sebring Sedan L Dodge Dakota L Chrysler Voyager minivan 3.3L Dodge Caravan, Grand Caravan & 4.7L Dodge Ram Pickup 1500 Series 3.3L Dodge Caravan minivan Caravan Cargo 2.7L Dodge Stratus Sedan 3.3L Chrysler Town & Country minivan 2.7L Chrysler Sebring Sedan 2.7L Chrysler Sebring Sedan L Dodge Caravan minivan 4.7L Dodge Durango 2.7L Dodge Stratus Sedan 3.3L Plymouth Voyager minivan 3.3L Caravan & Grand Caravan SE 2.7L Chrysler Sebring Sedan 3.3L Chrysler Town & Country minivan Ford / Lincoln L Crown Victoria (Excluding taxi & police 4.0L Explorer Sport Trac 3.0L Taurus LX, SE & SES sedan 5.4L F L Explorer L Lincoln Town Car (2-valve) 3.0L Taurus sedan and wagon 3.0L Supercab Ranger pickup 2WD L Explorer Sport Trac 3.0L Ranger pickup 4WD & 2WD 3.0L Taurus sedan and wagon L Taurus LX, SE & SES sedan 4.0L Explorer (4-door) Many Taurus 3.0L Sedans are also FFVs General Motors L Pontiac Montana SV6 (Canada) L Buick Terrazza 5.3L Sierra & Silverado truck 5.3LSierra & Silverado truck 5.3L Chevrolet Avalanche SUVs L Vortec-engine Suburban, 3.9L Chevrolet Express 3.5L Chevrolet Impala & Monte Carlo Tahoe, Yukon & Yukon XLs 5.3L Suburban, Tahoe, Yukon, Yukon XL L Chevrolet Uplander 5.3L Sierra & Silverado truck 2.2L Chevrolet S-10 pickup 2WD 3.9L Saturn Relay 5.3L Vortec-engine Chevrolet Avalance, 2.2L Sonoma GMC pickup 2WD 3.9L GMC Savana Suburban, Tahoe, GMC Yukon & Yukon XL Isuzu Mazda Mercedes-Benz 2000, , L Hombre pickup 2WD 3.0L Selected B3000 pickups 2.5L C230 sedan Mercury Nissan L C320 luxury & sport sedan & sport coupe 4.6L Mercury Grand Marquis (2-valve) 5.6L Armada L C320 sport sedan, wagon & sport coupe 4.0L Selected Mountaineers 5.6L Titan King Cab & Crew Cab source: National Ethanol Vehicle Coalition 3.2L C320 sport sedan 3.0L Selected Sables

34 Alternative Fuel Incentives Federal ethanol credit (VEETC): 51 per gallon Federal biodiesel credit: $0.50 or $1.00 per gallon Federal small ethanol producer credit: 10 /gallon Federal Commodity Credit Corp. credits for new production of ethanol and biodiesel State credit for ethanol facility: up to $4.5 million State highway taxes reduced for alt. fuels E10 exempt from 4% state excise tax until 12/31/06 Electric vehicles with special license plates are allowed free parking at meters; HOV access Counties provide highway tax reductions or exemptions for alternative fuels

35 Ethanol Production Facility Incentive Facility size: from 500,000 to 15,000,000 gallons per year Facility must be in production on or before January 1, 2012 Credit may be taken each year for up to 8 years or until credits equal investment made by the taxpayer in the facility, whichever comes first $0.30 per gallon of ethanol production capacity, per year Facility must have produced at least seventy-five per cent of its nameplate capacity that year No taxpayer that claims this credit can claim any other (income) tax credit for the same taxable year "Qualifying ethanol production" means ethanol produced from renewable, organic feedstocks, or waste materials, including municipal solid waste. Once statewide ethanol production capacity reaches 40 million gallons per year, no new capacity is eligible.

36 Ethanol Plants Announced Name Island Million GPY Clear Fuels (formerly Worldwide Energy) Kauai 7 Kauai Ethanol Kauai 12 Oahu Ethanol Oahu 15 Aloha Ethanol Hawaii This list is not necessarily exhaustive. Other ethanol production facilities may be in various stages of project start-up. Ethanol production facilities are not required to provide a Notice of Construction" if they are not intending to take the facility tax credit.

37 Sum of State & County Highway Taxes (cents per gallon) City & County of Honolulu County of Maui County of Hawaii County of Kauai Gasoline Ethanol LPG Biodiesel Diesel

38 Act Alternative Fuel Standard 196- State support for achieving alternate fuels standards. The State shall facilitate the development of alternate fuels and support the attainment of a statewide alternate fuel standard of: 10% of highway fuel demand to be provided by alternate fuels by 2010; 15% by 2015; and 20% by

39 Millions of Gallons Statewide Ground Transportation Fuels Demand , Actual and Projected, with RFS Hawaii s Actual and Projected* Ground Transportation Fuel Demand, Renewable Fuel for Diesel Vehicles Renewable Fuel for Gasoline Vehicles Diesel Gasoline actual projected * If recent and long-term trends continue

40 Sample Reports & Studies Biofuels Potential Current - Hawaii Energy Strategy Biomass Briefing Book by Rocky Mountain Institute Study Relating to Used Cooking Oil Generation and Biodiesel Production Incentives by the County of Hawai`i Select Hawaii Renewable Energy Project Cost and Performance Estimates by Global Energy Concepts Economic Impact Assessment for Ethanol Production and Use in Hawaii by BBI Hawaii Ethanol Alternatives by Stillwater Associates 2002 Biomass and Bioenergy Resource Assessment for the State of Hawaii by Hawaii Natural Energy Institute

41 Maps As a public service, the State GIS Program makes GIS data available to the public in two ways: GIS data is available for download at the State s GIS home page ( This data can be used within free data viewers (links to free viewers are available in the download section of the State GIS website), or within common GIS applications. The State GIS Program has developed a simple web mapping application, I-Map Hawaii, so that citizens can view common GIS data layers and create their own maps from within their web browser. This application is periodically updated with new and/or updated data.

42 Maps The map layers presented in this internet mapping application were generated using data gathered during a statewide biomass resource assessment conducted in 2002, "Biomass and Bioenergy Resource Assessment" prepared by the Hawaii Natural Energy Institute for the Department of Business, Economic Development, and Tourism. The full report is available at The maps are meant to supplement the above report and contain only a portion of the information presented therein. It is highly recommended that individuals interested in the maps download and read the full report to familiarize themselves with the data collection methods, data sources, and data points that are not covered by the supplementary maps.

43 For More Information Hawaii s Energy Renewable Energy Technologies Other State and Federal Programs: Database of State Incentives for Renewable Energy (DSIRE) Energy Data & Statistics Honolulu Clean Cities