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Biomass Kaua‘i biomass plant receives $72.9M in financing

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Posted: Friday, October 12, 2012 12:45 am

LIHU‘E — A portion of Kaua‘i’s energy needs will soon be met from burning woodchips.

Green Energy of Kaua‘i received this week  a $72.9 million loan guarantee to build a $90 million state-of-the-art facility to burn woodchips from trees grown and harvested on Kaua‘i.

The commitment from the U.S. Department of Agriculture’s Rural Utilities Service will enable Green Energy to begin construction of a previously announced 6.7-megawatt biomass-to-energy facility near Koloa, according to Green Energy Team LLC of Kaua‘i and Kaua‘i Island Utility Cooperative.

With construction scheduled to begin early 2013, the plant expects to be operational by 2014, in an effort to provide more than 11 percent of Kaua‘i’s energy needs, contributing significantly to KIUC’s efforts to generate 50 percent of its power from renewable resources by 2023.

“This is great news for Kaua‘i! The project will undoubtedly provide a boost to our economy with job creation and result in a sizeable savings for many residents,” Mayor Bernard Carvalho Jr. said in an email. “Additionally, it will enable us to take a giant step toward achieving 100 percent local energy sustainability by 2030, which is a major goal of the Kaua‘i Energy Sustainability Plan. I commend Green Energy Team and KIUC for partnering on a sustainable project that will benefit our island well into the future.”

The facility will be built near Knudsen Gap and expects to provide enough electricity to power 8,500 households, replacing about 3.7 million gallons annually of imported oil.

Eric Knutzen, co-founder of Green Energy, said that once the plant is operational, households on Kaua‘i would see an annual reduction in electric bills of $70 to $90 annually.

“It’s one way to help reduce upward power pricing,” he said, noting that the facility will be “truly sustainable, producing power by Kauaians, on Kaua‘i for Kauaians,” as opposed to fossil fuel energy sources that send money off-island.

“This will be the first closed-loop, biomass-to-energy plant in the United States, relying completely on the supply of its own sources of Kaua‘i biomass wood chips, with no off-island dependence and completely renewable,” Knutzen said.

“An efficient boiler will make it economically feasible,” Knutzen said of the plan to start off harvesting invasive Albizia trees up to where the land has a 15 percent grade and it is no longer economically feasible to remove the trees.

The facility will then plant non-invasive trees — such as eucalyptus — approved by the state’s Department of Land and Natural Resources that will later be used for woodchips.

“Organic tree harvesting is not forestry,” Knutzen said. “It’s considered to be diversified ag.”

Power will be sold to KIUC under a contract approved by the Hawai‘i Public Utilities Commission in October 2011.

Pricing of energy from the plant is below that of the current costs for generating power by burning fossil fuels and will not be subject to the volatility of oil prices over the 20-year term of the agreement.

Construction financing for the project will be provided by Deutsche Bank. The plant will be designed by Standardkessel Baumgarte Contracting GmbH of Germany, an international leader in high-efficiency boiler technology. Standardkessel is an equity partner in the project.

“We want to thank KIUC and its board of directors. Without their extraordinary support over the last six years this project would not have been possible,” Knutzen said.  

The project will help invigorate Kaua‘i’s diversified agricultural economy, creating more than 200 construction jobs, 39 permanent operating jobs and significant work for subcontractors and local service providers.

“This is especially important for Kaua‘i because this plant will provide firm power from a renewable source,” KIUC President and CEO David Bissell said. “This means the power is available when we need it and will allow KIUC to avoid spending money on additional fossil fuel-based generating capacity and instead invest in renewables such as solar and hydropower.

“We project that $200 million will be invested in renewable energy projects on Kaua‘i over the next two years by KIUC and private developers such as Green Energy. By the end 2014, Kaua‘i should be receiving more than 35 percent of its electricity from renewable sources.”

Green Energy Team was founded on Kaua‘i in 2005 to develop a biomass-to-energy project.

“The idea behind the project was that it would help accomplish three objectives: To lower Kaua‘i energy costs, to keep more money in the local economy and create jobs, and to contribute to sustainability efforts,” Knutzen said.

“Operationally, our agricultural management plan includes removing Albizia trees from state lands, and replacing them with DLNR Forestry-approved plantation trees, for sustainable forest growth, a renewable, long-term biomass supply.”

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19 comments:

  • hightide posted at 11:18 am on Sun, Oct 14, 2012.

    hightide Posts: 30

    Bio-fuel is another load of **** masquerading under the trendy "Green" theme. The original pitch of this FOR-profit organization was to continually re-plant MORE albizia trees and burn those. Environmentalists didn't like that too much, so looks like they've tailored it. And, yes, no mention in the article about the smoke stack, because ONCE AGAIN (welcome to Kaua`i) we're being snowed by the County, State, Feds, and KIUC. Oh we're surging on into a bright green future.... Green smoke? Oh we're saving money. We? We're not KIUC, though we birthed the monster. The day our electric rates go noticeably and permanently down is the day we abolish KIUC and found a true co-op. Does anyone reading this recall voting (WE own KIUC) about the introduction of this pricey "green" technology spewing brown pollutants into our pristine air?

     
  • KoloaMynah posted at 8:50 pm on Sat, Oct 13, 2012.

    KoloaMynah Posts: 0

    Albizia is rich in nitrogen. When you burn it, doesn't that put extra nitrogen oxide (NOx) in the air? Isn't that what makes smog and acid rain? What other chemicals will this plant put in the air? I read a PACE University article that said biomass plants can produce more carbon monoxide (CO) than coal power plants. Could we get some science lessons along with all this talk of money?

     
  • KoloaMynah posted at 7:47 pm on Sat, Oct 13, 2012.

    KoloaMynah Posts: 0

    KIUC customers will be paying approximately $100,000,000 to burn trees down over a 20 year period. Brilliant!

     
  • KoloaMynah posted at 7:43 pm on Sat, Oct 13, 2012.

    KoloaMynah Posts: 0

    So, a German bank is loaning a Netherlands-owned company 72 million dollars to build a plant on Kauai? That's awfully local. We get a supposed 5% annual savings in exchange for a steady stream of smoke blowing West towards Koloa, Poipu, Omao, Lawai, Kalaheo...?

     
  • KoloaMynah posted at 7:41 pm on Sat, Oct 13, 2012.

    KoloaMynah Posts: 0

    This is not a news story, but a reprint of a press release.

     
  • Tom Coter posted at 11:11 am on Sat, Oct 13, 2012.

    Tom Coter Posts: 0

    Agreed!

     
  • Tom Coter posted at 11:10 am on Sat, Oct 13, 2012.

    Tom Coter Posts: 0

    Clean energy is one of the world's fastest growing industries, and it employs millions of people.


    The best way to create jobs and grow the economy is to invest in clean, renewable energy like wind, solar and geothermal power. Clean energy is one of the world's fastest growing industries. Global investment in clean energy climbed to $260 billion worldwide in 2011, a record high. That’s a 5% climb compared to 2009 and five times the investment made in 2004.


    And 2010 was the first time that investment in renewable energy surpassed investment in fossil fuels. According to one estimate, global clean energy investment will grow by another $140 billion by 2021.


    All this investment creates jobs. Just look at the solar industry in the U.S., where jobs more than doubled from 2009 to 2011. According to one comprehensive study, the green energy economy (which includes clean energy) employs 3.1 million Americans today. Clean energy investment is a smart jobs plan. www.clmtr.lt/cb/kex

     
  • ktet posted at 6:18 am on Sat, Oct 13, 2012.

    ktet Posts: 0

    Renewable energy is a smart jobs plan. More carbon pollution is not. Learn more: @realitydrop www.clmtr.lt/cb/kex0eJ

     
  • Bioenergy Action posted at 1:27 am on Sat, Oct 13, 2012.

    Bioenergy Action Posts: 0

    Supporting information for the above can be found here:
    http://www.biofuelwatch.org.uk/resources-on-biomass/

     
  • Bioenergy Action posted at 1:24 am on Sat, Oct 13, 2012.

    Bioenergy Action Posts: 0

    There are several important factors missing from this story. Industrial biomass is NOT green, it is as carbon intensive as coal and it takes up to 200 years to repay the carbon debt created by burning dedicated biomass for energy. The proposal is to clear land and plant monoculture eucalyptus plantations. As with all monocultures, this harms biodiversity, since plantations do not provide diverse habitats for flora or fauna. Eucalyptus is used because it is fast growing, but it is also an extremely water intensive crop. Further more, Eucalyptus is the subject of widespread genetic engineering experiments specifically for biomass uses in the Southern United States. As with all for-profit ventures, they will use the most profitable fuel stock, so GE trees could be making their way to Kaua‘i as part of the future of this development. Burning coal or wood to generate energy is old, dirty, polluting tech. We need to switch to clean, green renewable energy from the elements: sun, sea and wind

     
  • Corruptiondetector posted at 6:55 pm on Fri, Oct 12, 2012.

    Corruptiondetector Posts: 44

    Well done

     
  • Mistajohn posted at 3:12 pm on Fri, Oct 12, 2012.

    Mistajohn Posts: 0

    This sounds like an OK idea...but a biomass plant generally has a very tall smokestack - I haven't heard anyone mention the pollution and building-a-big-powerplant-in-Koloa aspect of this project. Google up some images of biomass plants and you'll see they are not small and hard to spot...

     
  • cr8tivj posted at 1:50 pm on Fri, Oct 12, 2012.

    cr8tivj Posts: 3

    KIUC could afford to install solar water heaters on homes and then long term lease them for half the annual cost of powering an electric water heater therefore saving the cutomer (more than $70-$90) and still they would make money from additional household power consumption.
    The future for all Power companies will switch from supplier (trying to keep us hooked on oil) to maintainance provider (guaranteeing connections and providing new ones) once we learn to harness the resources that we have in nature. After all, you can't barrel the sun, wind or sea...

     
  • cr8tivj posted at 1:19 pm on Fri, Oct 12, 2012.

    cr8tivj Posts: 3

    "you can't buy solar panels for everyone, because KIUC is in business of SUPPLYING energy at a cost, they don't give stuff away for free."

    So the goal is to never have "free" energy even if it may be possible? Capitalism over community = sustainability?

     
  • cr8tivj posted at 12:49 pm on Fri, Oct 12, 2012.

    cr8tivj Posts: 3

    Some more things to ponder.. Where are these Albizia trees/future fuel located? Are all the trees on county/public land? What about trees on private land? Can land owners sell their trees to Green Energy of Kaua`i resulting in once again paying for energy from an outside source? How long does Green Energy Kaua`i estimate we can rely on our Albizia stock as a fuel source? Are we also to believe that Green energy can gurantee growth of replacement trees once the Albizia's are gone?

     
  • slappyt posted at 12:00 pm on Fri, Oct 12, 2012.

    slappyt Posts: 2

    This almost sounds too good to be true. An alternative energy, sustainable source that will actually cause MORE trees to be planted? Wow. The company is locally owned and operated, will create green jobs AND lower our dependence on diesel, not to mention be CHEAPER? Wow.

    And instead people complain -- you can't buy solar panels for everyone, because KIUC is in business of SUPPLYING energy at a cost, they don't give stuff away for free. And they said the project would lower EVERY household $70-90 a year. And who said these guys ran around planting albizia trees for the past few decades? They're culling the ones already growing, and then will use eucalyptus when they're mature enough.

    It still sounds too good to be true. It would be nice to be able to read their proposal to KIUC. I also don't see any mention of the state/county permitting process, which is what helped kill the G&R ethanol/biomass burning project.

     
  • cr8tivj posted at 10:33 am on Fri, Oct 12, 2012.

    cr8tivj Posts: 3

    Where is the additional $18 million coming from to complete the plant?


    It takes oil/gas to cut down these trees with chainsaws and it takes oil/gas to haul the trees to the biomass plant. Who pays for this operational cost? Who pays to purchase/plant the trees and care for them until harvest?


    KIUC is not independant, if it continues to buy fuel/oil/power from an outside source. This idea seems to create additional expenses/oil dependance/pollution and very little reward. An 8-year effort in order to save "$70-$90" a year?


    The plant "expects to provide enough electricity to power 8,500 households," which equals around $10,500 per household based on a $90 million dollar cost. Couldn't this money buy solar panels for these 8,500 households for less than $10,000 per home?


    The sun is not going anywhere (at least not in our lifetimes) so why not use it for more than a lure to bring tourism?


    Also, imagine if the smart meter idea was scrapped and the time/effort/money went to a solar plan instead.

     
  • albino posted at 9:41 am on Fri, Oct 12, 2012.

    albino Posts: 81

    I think it's a great idea. Getting us away from foreign oil to a more locally grown resource. And the albizia is a weed anyway so if they remove a few to plant some eucalyptus, then great. It's better than letting the island be overrun by albizia. I fail to see how removing an invasive species is "corporate greed" when all we do is burn oil.

     
  • tunataxi posted at 7:44 am on Fri, Oct 12, 2012.

    tunataxi Posts: 663

    So they come to Kauai; take an already known invasive tree and plant thousands more. Now they get 72 million $$$$ to build a plant. Realizing the Albizia tree has spread throughout the island they switch to eucalyptus. BUT they only want to remove the tree up to a grade where it is still profitable. Once again Corporate greed has shown its ugly head. They should be forced to cut down every Albizia tree on the island and poison the stump. Maybe they don't need to log it but since they proliferated it in the name of MONEY they should at least spend as much effort to erradicate it as they did to grow it. If they don't, it will spread and completely devastate the enviroment over the "15" % grade. Send a crew up the hill with a chain saw....if it was gold up there, they surely would !!!!

     

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