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Neighbor isle wind plan would boost state economy

A new UHERO study assesses the impact of proposed projects on Lanai and Molokai

By Alan Yonan Jr.

LAST UPDATED: 8:21 a.m. HST, Nov 1, 2012

Meeting part of Hawaiian Electric Co.'s renewable energy target with large-scale wind projects on the neighbor islands would have a net positive effect on the state's economy, according to preliminary findings of a study being done by the University of Hawaii Economic Research Organization.

The study was undertaken in an effort to assess the impact of the proposed wind projects beyond just the cost to the electricity sector, according to UHERO.

"We looked at various scenarios and found that the economic impact was positive," said Makena Coffman, a UHERO research fellow who is doing the study with Paul Bernstein, a UHERO consultant.

Coffman delivered an early look at some of the study's findings during a presentation at the UHERO Forum held this week at the Hilton Hawaiian Village. Coffman and Bernstein are nearing completion of the study, which will be published in an economic journal.

The study assumes that developers will be successful in building proposed wind energy projects on Lanai and Molokai with a combined generating capacity of 400 megawatts. Electricity from the projects would be transmitted to Oahu via an undersea cable. Although Coffman did not give the assumed cost of the wind projects and cable, several estimates put the cost at more than $1 billion.

Utility-scale wind projects are a significant piece of HECO's renewable portfolio standard, a legal mandate requiring that 40 percent of the electricity sold by the utility come from renewable sources by 2030.

Adding 400 megawatts of wind generation to HECO's renewable portfolio standard would, among other things, serve as a hedge against "potentially rising and volatile fuel prices, including biofuel," Coffman said. The wind projects also would have a ripple effect throughout the economy, creating jobs, generating spending, reducing oil imports and cutting emissions, she said.

The state and U.S. Department of Energy have begun an environmental review process that will look at all forms of renewable energy throughout the state and a cable to interconnect the islands.

Coffman acknowledged that there is community opposition to the proposed wind projects on Lanai and Molokai by opponents who cite the damage that would be done to the islands' natural beauty and cultural sites.

"There has been a long conversation, and a necessary conversation," Coffman said. "This (study) can help inform that conversation," she added.

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