Permitting - HSBApresentation

Hawaii’s Renewable Energy:Permitting : 

Hawaii’s Renewable Energy:Permitting State of Hawaii Department of Business, Economic Development & Tourism www.hawaii.gov/dbedt/info/energy Joshua Strickler, Esq. P.E. joshua.b.strickler@dbedt.hawaii.gov 808-587-3837

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Contents Hawaii’s Energy Context – A Somber Reality Hawaii Clean Energy Initiative: A Foundation for Transformation Facilitator Role: Permitting

Reducing Hawaii’s dependence on fossil fuels is a long-standing objective : 

Reducing Hawaii’s dependence on fossil fuels is a long-standing objective Despite objective, little progress made – the needle has not moved Over 36 years, petroleum consumption remains at about 89%

Hawaii is the most petroleum dependent state : 

Hawaii is the most petroleum dependent state Petroleum dependence for electricity – top six states

Alaska North Slope oil, the basis for the design of our refineries, is no longer available : 

Alaska North Slope oil, the basis for the design of our refineries, is no longer available More than 96% of petroleum in Hawaii now comes from foreign sources US – Alaska

Hawaii has the highest electricity prices in the U.S. : 

Hawaii has the highest electricity prices in the U.S.

High energy costs multiply throughout the economy : 

High energy costs multiply throughout the economy The fuel surcharge affects the cost of over 80% of the goods sold in Hawaii

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Source: International Energy Agency To generate the energy required worldwide by the 2030s would require us to find an additional 1.4 MBD every year until then. Can Hawaii assume this will happen, and base our future on it?

Hawaii has a wealth of renewables:estimated @ 150% of current installed capacity : 

Hawaii has a wealth of renewables:estimated @ 150% of current installed capacity

What has held back renewable penetration? : 

What has held back renewable penetration? Barriers must be removed for Hawaii to realize energy independence and economic stability

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Contents Hawaii’s Energy Context – A Somber Reality Hawaii Clean Energy Initiative: A Foundation for Transformation Facilitator Role: Permitting

Hawaii Clean Energy InitiativeNational Partnership to Accelerate System Transformation : 

Hawaii Clean Energy InitiativeNational Partnership to Accelerate System Transformation The goals are: Achieve a 70% clean energy economy for Hawaii within a generation Increase Hawaii’s security Capture economic benefits of clean energy for all levels of society Foster and demonstrate innovation Build the workforce of the future Serve as a model for the US and the world

Hawaii urgently needs to transition to an economy powered by clean energy, instead of imported foreign oil : 

Hawaii urgently needs to transition to an economy powered by clean energy, instead of imported foreign oil …but doing so will require a substantive transformation of regulatory, financial, and institutional systems In 2004, Hawaii’s RPS included 6% renewables, which would increase only incrementally Percent Renewable Energy Range of scenarios under business as usual assumptions (i.e., attainment of RPS, RFS)

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70% Clean Energy scenario analysis(Booz Allen Hamilton) Hawaii greenhouse gas carbon tax/abatement analysis (McKinsey & Company) Economic modeling of energy system Inter-island cable: feasibility and cost/benefit studies Technical and economic assessment of plug-in hybrid and electric vehicles 100% Renewable Lanai Forest City Highly Efficient Communities Modeling electricity grids on all islands Maui grid integration Bioenergy Master Plan Wind resource and storage testing Regulatory framework development HCEI analysis & project activities

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State Renewable Energy Facilitator authorized First year of GHG Emission Reduction Task Force Marine Renewable Energy Center Hawaii, Taiwan, and Lockheed OTEC partnership Feed-in Tariff and Decoupling Dockets open and in progress HECO Smart meter initiative Solar Water Heater Mandate for new construction homes became law DOE-Hawaii hospitality roundtable for energy efficiency Better Place announced first statewide initiative in Hawaii – HECO MOU Phoenix Motorcars announced EV testing on Maui with MECO Hawaii Renewable Energy Development Venture kicked off Third Party Administrator contract in negotiations HCEI-related events & milestones

HCEI Scenarios: Can we achieve 70% clean energy?Really? : 

HCEI Scenarios: Can we achieve 70% clean energy?Really? First cut at order of magnitude requirements and impacts Evaluated sensitivity to several factors No absolutes defined in this evaluation Most work on electricity, some on transportation, little on jet fuel Based on current commercially viable technologies; potential game changers like OTEC and algae to energy are not considered All scenarios are presented without imported biofuels; all scenarios can hit the goals with imported biofuels Follow-up economic and cost/benefit impacts, refinements in progress.

We now know what it will take to reach 70% clean energy in 2030 : 

We now know what it will take to reach 70% clean energy in 2030 2020 2030 4365 GWh 4365 GWh 5820 GWh 30% Energy efficiency 40% Renewable energy 30% Maximum fossil fuel 2008 15,000 10,000 5000 Total GWh per year Hawaii Electricity Portfolio

Scenario 8Invest $16 billion, achieve $46.1 billion savings@ oil costs $100/barrel : 

Scenario 8Invest $16 billion, achieve $46.1 billion savings@ oil costs $100/barrel Figures in billion 2008 dollars (except per barrel cost) PV figures based on discount rate of 7%

Scenario 8: The probability of a negative NPV is less than 20% : 

Scenario 8: The probability of a negative NPV is less than 20% Approx. 18% probability of a negative NPV result Simulation based on 1,000 runs

Problem: Four legacy drivers support the status quoand represent barriers to be overcome : 

Problem: Four legacy drivers support the status quoand represent barriers to be overcome Policy/Regulatory Framework Utilities compensated for increased electricity sales; pass-through of fuel price increase is renewable disincentive IPPs need transparent “rules of the road,” certainty and predictability No clear policy support or incentives for significant new investment and technology upgrades in renewable generation, advanced transmission and distribution  Need policy on net metering, interconnection, wheeling, and utility protocols for integrating variable generation which will impact transmission and distribution systems Technology Development & Integration at System Level Solutions needed for reliable integration of high levels of variable renewable generation with traditional baseload generation and with existing grid Energy storage and “firming” technologies are probably part of the solution, but which technologies will be most effective and how much storage is needed to effectively manage the grid is under development Few incentives for advanced metering, dynamic rates, load management, demand response or distributed generation Financing/Capital Need a healthy and financially viable utility to make necessary investments Significant new public and private investments required to support the magnitude of system changes needed for a clean energy future: Open up Hawaii’s markets to private capital Costs have to be understood and rate structures designed to balance utilities' financial and consumers’ rate needs System Planning Hawaii’s energy system is built on the assumption of consistent supply of low-cost oil, central power plants, grids that could be continually adjusted to meet load needs; utilities are structured to control transmission and distribution as well as generation

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Contents Hawaii’s Energy Context – A Somber Reality Hawaii Clean Energy Initiative: A Foundation for Transformation Facilitator Role – Permitting

Facilitator : 

Facilitator HRS 201-12.5 - established a full-time, temporary renewable energy facilitator position within DBEDT with the following responsibilities: Facilitate the efficient permitting of renewable energy projects Improve the efficiency of the permitting process in order to implement key renewable energy projects Coordinate projects on behalf of DBEDT, including the HRS 201N renewable energy facility siting process

Magic Wand : 

Magic Wand Voldemort model Phoenix tail Hexes Curses Jinxes

Coach : 

Coach Call Plays Explain the rules Zealously advocate on projects behalf Practice

The playing field: Permits that may be required : 

The playing field: Permits that may be required

Big field:Scope of Permits in Hawaii : 

Big field:Scope of Permits in Hawaii Possibly over 100 permits 25 Federal, State, and County Agencies Agencies with the most impact State DOH, DLNR, Office of Planning; U.S. EPA; County planning offices Energy projects are also dependent on the Public Utilities Commission (PUC) Power Purchase Agreements (PPA) Transmission

Rules of the Game:Applicable Laws* : 

Rules of the Game:Applicable Laws* HRS 343 – Environmental Impact HRS 205 – Land Use Commission HRS 196 – Energy Resources HRS 201N – Renewable Energy Siting HRS 342B – Air Pollution Control HRS 342D – Water Pollution Agency Rules * Partial list

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Call the plays: Permits that may be required for a specific renewable energy project

Practice:Speed up the process : 

Practice:Speed up the process Six key points to expedite permits Build mutual understanding Contact stakeholders early Ensure complete applications Analyze process, performance, costs Use information technology Implement system of staff flexibility

Mutual Understanding/Analyze Process : 

Mutual Understanding/Analyze Process Questionnaire Engineering decisions Design Technology Business decisions Process Location Legal decisions Environmental Land Use

Advocate:Contact Key Stakeholders : 

Advocate:Contact Key Stakeholders Meetings with State and Federal agencies Meetings with local environmental and public interest groups Testify before the Legislature Community meetings

Use Information Technology / Ensure Complete Applications : 

Use Information Technology / Ensure Complete Applications Developing an online permitting process with the Department of Health Similar to the online permitting process used by the Department of the Commerce and Consumer Affairs

Staff Flexibility : 

Staff Flexibility Chapter 201N authorizes the State Energy Resources Coordinator (Section 196-3) to develop a “permit plan” , and on a fee-for-service basis, assists applicants by coordinating permitting processes. Developing administrative rules Based in part on existing rules in Washington and Oregon

Working with agencies, businesses, and communities as partners, we achieve together what none of us could do alone. : 

Working with agencies, businesses, and communities as partners, we achieve together what none of us could do alone. “Our performance is measured by the successful transition of the state energy system to clean and secure sources with stable costs, a skilled workforce, healthy businesses, and a strong economy.” Our Metric for Success…