As Hawaii continues to reduce its dependence on fossil fuels by increasing energy efficiency and using more renewable resources, as put forth by the Hawaii Clean Energy Initiative (HCEI), a key piece to achieving a clean energy future is missing.

HCEI, launched in 2008 through a partnership between the state and U.S. Department of Energy (DOE), aims to achieve 70 percent clean energy in two major areas: electric power generation and transportation.

Specifically, in the electric power sector, HCEI calls for 40 percent of electricity sales to be generated from renewable sources and 30 percent of projected electricity consumption to be reduced through increased efficiency by 2030.

In the recent public  meetings held across the state by the U.S. DOE for the Hawaii Clean Energy programmatic environmental impact statement, only demand-side efficiency measures — using less energy at end-use activities — were within the scope of achieving the 30 percent energy-efficiency portfolio standard.

This raises the question: Why is supply-side efficiency not considered, too?

An energy system is structured into four major parts: production, conversion, distribution/transmission and end-use (final consumption by residential, commercial, industrial and transportation sectors).

Although there is energy loss at each stage, Hawaii has focused on increasing energy efficiency at the very last stage. If, however, we considered the systemwide savings potential and were to increase efficiency at the conversion stage of Hawaii’s energy system, this would result in higher fuel savings.

In other words, less fuel would be required to generate the same amount of electricity for end-use.
Hawaii has a 47 million-barrel-of-oil-equivalent (mmboe) energy system, 40 of which is consumed by power generation and transportation. Because of the low efficiency of these two sectors (25 percent and 30 percent, respectively), we are losing 28 mmboe.

Achieving higher efficiency in transportation presents its challenges, but we can increase efficiency of conversion for power generation by upgrading the power plants run by our electric utilities.

The upgrade cost would not be a big issue here because:

>> Most of the existing oil-based generation units have to be upgraded to comply with Environmental Protection Agency regulations that will be implemented in 2015; and

>> Most of these units are 40-60 years old and require huge investments for refurbishment and maintenance for continued use. As such, we are missing the opportunity to increase generation efficiency.

We need to convert our old, low-efficiency steam-based power generation units into more efficient gas turbines or even higher-efficiency combined-cycle gas turbine (CCGT) units, which can burn natural gas, diesel, jet fuel, or even fuel oil in extreme cases.

A gas turbine is a type of turbine that runs with hot gas emerging from the combustion chamber.

Although any fuel can be combusted in these turbines — and such upgrade does necessarily imply switching to burn natural gas — the highest efficiency, lowest maintenance cost and cleanest burn is achieved by natural gas.

Thus, just substituting the current steam turbines with gas turbines can increase the conversion efficiency.

Hence, if Hawaii’s electric utilities were to install new gas turbines and convert their existing plants into highly efficient CCGTs, generation efficiency would increase from 30 percent to 50-60 percent.

Such supply-side efficiency increase would save 20-29 trillion BTUs of energy for the same amount of end-use electricity, which well exceeds total potential demand-side efficiency saving (of the current loss of 19 trillion BTUs in industrial, residential and commercial sectors).

Therefore, while savings potential at end-use — i.e., the 30 percent energy efficiency portfolio standards — should not be disregarded and are still an integral component in the overall reduction in fossil fuel use, we are missing the elephant in the room.